which of the following accounting steps in the accounting process would be completed last? This is a topic that many people are looking for. star-trek-voyager.net is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, star-trek-voyager.net would like to introduce to you The Accounting Cycle. Following along are instructions in the video below:
“Now that we ve learned how to do journal entries. We learned about making a a trial balance. We learned about how we make adjusting trial or adjusting entries after trial balance to make adjusting journal. Entries.
And then we have an adjusted trial balance ultimately. We have some financial statements. We have some closing entries and then then we can reverse some things that we made mistakes with so i think it d be good. We just go through and just kind of go through the process this cycle.
And and just talk just to make sure you understand exactly what s going to take place at the firm of how a transaction ultimately is recorded by a company. So first off. We say it all starts with the journal entry right you ve got some kind of transaction. You make an entry for it.
And it s recorded that s how it initially comes into comes into existence so to speak from a financial perspective. Then ultimately you posted to a ledger..
Now for different firms that might be different things on the old days. There was a really big ledger write some big sheet of paper that had all the there was a book that it was in and you go to that ledger and you you ultimately update these things over time offer your firm today it might be excel is your ledger or maybe. Quickbooks. Or something like that ultimately you make the journal entries and then you need to post them somewhere right.
So your key is doesn t really matter. What the format of the ledger is that that you re posting this entry to some kind of master account or some kind of master file. And then after that remember you create the trial balance. Where you re basically saying.
Okay. What are the what are the totals. You know of accounts. Receivable and all these things and and you ve got the two columns.
You ve got the debits and then you got the credits and you just want to see that they balance you want to see that they re equal to each. Other that was kind of the purpose of the trial balances to see the things balance and then after you ve got the trial balance..
Together. You go ahead. And you make adjusting journal entries. Remember we talked about that some things over time.
They expired or they get used up right you might say okay. Well you know i looked in the supplies. Have been used and we weren t really making journal entries regularly for that or there was some interest expense of revenue. And you go ahead.
And you make these adjusting journal entries. These a ges. You ought to make these. And then after you ve done that you re in a position to create an adjusted trial balance that now reflects the adjusting journal entries.
And then after you have done that then you go ahead. And start putting together some financial statements..
Some things we haven t talked about yet the income statement. The balance shape. The statement of cash flows. Things we re going to get to in other videos.
But you can put those together. Once you have an adjusted trial balance and then the very end of the period. What you re ultimately doing after you ve had the financial statements. After you ve shown all that you close out those temporary accounts right the the revenue.
The expenses the dividends remember those things or they just exist for a certain period right for a year a quarter. But then we close them out close them out to retained earnings now ultimately through that income summary account. But ultimately these things get closed out and they end up going to retained earnings. Which is a permanent account and then after you ve done the closing entries.
Then you can go ahead. And say okay..
Well let s put together a post closing trial balance. And again as always want to make sure that our debits equal our credits. And if it does if they don t then we know that we made some kind of mistake along the way and then optionally you know at the beginning of the next period. If we realize that we made some kind of mistake.
Maybe we shouldn t have made an adjusting journal entry one of those entries up here. We say we shouldn t have done that we actually found the supplies or that we thought we had used or whatever you can go ahead. And you just reverse an entry right you just flip it if you if you credited as supplies before you debit. It in the advice first so for the corresponding entry you just basically flip the entry.
And that undoes the effect of any kind of mistaken entry that you did you basically want to undo. ” ..
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