ACCT 3110 1st Edition Lecture 6 Outline of Last Lecture I. Deferral Adjusting EntriesII. Accrual Adjusting EntriesIII. Closing EntriesIV. Reversing EntriesOutline of Current Lecture I. Steps of the Accounting CycleII. EquityIII. Cash BasisIV. DepreciationCurrent LectureChapter 3 Accounting Information SystemsThe Accounting Cycle1. Identify transactions to record2. Reversing entries (at beginning of month)—exact opposite of adjusting entries from previousperiod3. Record in special or general journal4. Posting- Take total of general journal and post to general and subsidiary ledgersa. Post to general ledger weekly or monthlyb. Post to subsidiary ledger daily5. Prepare unadjusted general ledger trial balance- debits should equal credits6. Record adjusting entries7. Prepare adjusted trial balance8. Record closing entries at the end of the year (expenses, revenues, dividends)9. Post closing trial balance- Impact on equity is only seen with a revenue, expense, or transaction with owner- An entry with cash and accounts receivable does not affect equityThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Only small companies use cash basis- Cash basis records revenue when cash is received and expenses when cash is paid- Depreciable Basis: The amount you would depreciate over an assets useful lifeo = Original value – Salvage
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