(IN YOUR WORDS) a. Describe the content and purpose of a post-closing trial balance b. State...

(IN YOUR WORDS)

a. Describe the content and purpose of a post-closing trial balance

b. State the required steps in the accounting cycle.

Solutions

Expert Solution

a. The accounting cycle is like a circle. It has a definite beginning and a definite end. The last thing that occurs at the end of accounting cycle is to prepare a Post Closing Trial Balance. It is a report that lists all the accounts of a company and their balances after all adjustments and closing entries have been made.

CONTENT- It shows the final balance in company accounts for the current accounting period, which are exact same balances that the accounts have in the beginning of next accounting period.

PURPOSE- The only purpose of preparing a Post Closing Trial Balance is to make Financial Statements so to identify the financial position of the company.

b. Steps required in Accounting Cycle:- There are a total of 8 steps in an accounting cycle, it is a process of completing the bookkeeping tasks, which are as under-

1. Identify the transactions

2. Record the transactions in General Journal

3. Posting the transactions from General Journal to General Ledger

4. Prepare Unadjusted Trial Balance

5. Prepare a worksheet to ensure debits and credits are equal.

6. Adjusting journal entries

7. Prepare the Financial Statements

8. Closing the books

ekkarill92 answered 1 year ago

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