MUHASEBE I - Deneme Sınavı - 3

The steps in accounting cycles briefly are:
• Opening entries based on opening balance sheet
• Posting opening entries to ledger accounts
• Analyzing and journalizing daily transactions
• Posting daily transactions to accounts
• Preparing monthly trial balances
• Preparing unadjusted trial balance at the end of the period
• Adjusting entries
• Preparing adjusted trial balance
• Preparing financial statements
• Closing entries
• Preparing post-closing trial balance

The steps in accounting cycles briefly are:
• Opening entries based on opening balance sheet
• Posting opening entries to ledger accounts
• Analyzing and journalizing daily transactions
• Posting daily transactions to accounts
• Preparing monthly trial balances
• Preparing unadjusted trial balance at the end of the period
• Adjusting entries
• Preparing adjusted trial balance
• Preparing financial statements
• Closing entries
• Preparing post-closing trial balance

As the revenue accounts, expense accounts and Income Summary accounts were closed, it means that they have no balances. So, in the post-closing trial balance those type of accounts will not take place. Assets, liabilities and Capital accounts are the only accounts that have balances left at the end of the period.

Financial statements are prepared in order;
• Income statement
• Statement of owner’s equity
• Balance sheet

Income statement is the financial statement that reports operation results of a business for a specific period of time (month, quarter quarter, or year year).

Statement of owner’s equity reports the changes in the capital throughout the period caused by the owner’s capital investments or withdrawals, net profit or loss.

Balance sheet reports the assets, liabilities and the owner’s equity in a specific date.

Liquidity is the measure of how quickly and easily an account can be converted into cash

Current assets include the assets that will be converted into cash, sold, consumed or received within 12 months or within the business’s operating cycle, and the cash and cash equivalents.

Non-current assets include the assets acquired to be used in business ‘s operations for more than 12 months and receivables of which due dates are more than 12 months

Owner’s equity shows the owners’ investments, profit and loss of the period.

The steps in accounting cycles briefly:
• Opening entries based on opening balance sheet
• Posting opening entries to ledger accounts
• Analyzing and journalizing daily transactions
• Posting daily transactions to accounts
• Preparing monthly trial balances
• Preparing unadjusted trial balance at the end of the period
• Adjusting entries
• Preparing adjusted trial balance
• Preparing financial statements
• Closing entries
• Preparing post-closing trial balance

For the preparation of financial statements, the starting point is the adjusted trial balance.

Therefore, information given in the financial statements must be relevant, faithfully representable, comparable, verifiable, timely and understandable.

For the preparation of financial statements, the starting point is the adjusted trial balance. Adjusted trial balance is one form of trial balance that holds in-term transactions’ totals and balances as well as the end of the period transactions’ totals and balances for final checking of the accounts and preparation of financial statements.

Income statement is the financial statement that reports operation results of a business for a specific period of time (month, quarter quarter, or year year).

Balance sheet reports the assets, liabilities and the owner’s equity in a specific date. In other words, balance sheet provides information about the financial position of the company. In the trial balance you can easily find out asset, liability and owner’s equity accounts which will form the balance sheet.

Liquidity is the measure of how quickly and easily an account can be converted into cash.

Salary payable is an example of current liabilities.

In order to close revenue accounts, the revenue account must be debited.