BUSI 1004 Chapter Notes - Chapter 2: Retained Earnings, Uptodate, Income Statement

• School: Carleton University
• Department: Business
• Course: BUSI 1004
• Professor: Shannon Butler

Document Summary

Includes: the creation of the charts of accounts, entering of journal entries, posting to the. Ledger, creating a trial balance, making any necessary adjusting entries, creating an adjusted. Trial balance, preparing the financial statements, and finally preparing closing entries. When a company is formed, it is determined which accounts will be needed to accurately record the business transactions of the company, and accurately relate that information to users of its financial statement. Accounts classified as: assets, liabilities, sha(cid:396)eholde(cid:396)s" e(cid:395)uity, revenue, expense. This list is called the charts of accounts. The second step in the accounting cycle is setting up any opening balances. In most cases, these opening balances will be zero for the first year of business. In the following years, all permanent accounts will have an opening balance equal to the ending balance of the previous year. All temporary accounts will be set back to zero. Accounting transactions are entered into something known as a journal.