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Accounting Reviewer 2: Business Documents

The document outlines the key concepts in accounting including: 1. The double-entry system where every transaction affects at least two accounts with equal and opposite debits and credits. 2. The accounting cycle which is the standard process of identifying, recording, posting, preparing financial statements and closing entries for a period. 3. Key steps in the cycle include journalizing transactions, posting to ledgers, preparing trial balances and financial statements, and making adjusting and closing entries.

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Jeshel Anne Ronquillo
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28 views

Accounting Reviewer 2: Business Documents

The document outlines the key concepts in accounting including: 1. The double-entry system where every transaction affects at least two accounts with equal and opposite debits and credits. 2. The accounting cycle which is the standard process of identifying, recording, posting, preparing financial statements and closing entries for a period. 3. Key steps in the cycle include journalizing transactions, posting to ledgers, preparing trial balances and financial statements, and making adjusting and closing entries.

Uploaded by

Jeshel Anne Ronquillo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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ACCOUNTING REVIEWER 2

● Double-entry system - the transactions in accounting have a dual effect which means
that every transaction affects at least two accounts.
* For every debit, there is a corresponding credit.
● Accounting Cycle - a standard sequence of accounting procedures done to
accomplish the accounting process.
1. Identifying and Analyzing the events to be recorded.
● Business Documents - are forms containing evidence to support a
business transaction.
2. Recording transactions in the journal.
● Journalizing - this is a recording of transactions in the journal.
● Journal - is a chronological record of events or business transactions
showing all the effects of each transaction in terms of debit and credit.
This is also called the first book of accounts.
3. Posting journal entries to the ledger.
● Posting - it is the transferring of information found in the journal.
● Ledger - the book of final entry.
4. Preparing the trial balance.
● Trial Balance - is a list of accounts found in the ledger together with the
account’s balance or total.
5. Preparing the worksheet and adjusting entries.
● Worksheet - is a common tool used by accountants to assemble on a
sheet of paper all the information needed to prepare the financial
statements, adjusting entries, and post-closing trial balance.
6. Preparing the financial statements.
● Financial Statements - a statement of the financial position of the
business.
7. Journalizing and posting of closing journal entries.
● Adjusting Entries - are prepared at the end of the accounting period to
update the accounts for internal transactions.
8. Journalizing and posting of closing journal entries.
● Closing Entries - are prepared at the end of the accounting period to
update the owner’s capital account.
9. Preparing the post-closing trial balance.
● Post-closing Trial Balance - is prepared from the general ledger
accounts to assure if the entries are posted correctly.
10. Journalizing and posting of revising journal entries.
● Reversing Entries - are prepared to simplify the accounting process.

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