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Transcript of Accounting Cycle
Just the big picture... (details to follow in the next four months!)
and Closing Entries
Transactions are the business dealings of a company. Every transaction must have a source document.
One last point...
a little humour about accounting misconceptions...
And that's the accounting cycle. We then move in to the
next period, and the cycle starts over again.
The source document information is put into the company's journal like this...
The journal entries are
posted to the ledger.
Adjusting entries ensure accurate account balances,
while closing entries bring temporary accounts to zero
and transfer the balances to the capital account.
The post-closing trial balance
contains only the permanent accounts:
assets, liability, and capital.
Worksheets are used to rough out any adjustments
and organize financial statement information.
Video created by Christine Nehring
The adjusting and closing
entries are posted to the ledger.