Posted: January 6th, 2017

explain why the closing process is so important. Respond to question by addressing nominal (temporary) accounts.

      • Assignment Hints/Suggestions: The assignment relates to completing the accounting cycle and will familiarize you with the remaining steps in the accounting cycle. Here are some hints and suggestions for certain questions in this assignment:

        Question 1: You might find the information listed on page 194 of the text useful in responding to this question.

        Question 2: Here is the correct response to the first of three parts of this question, that serves as an example of an acceptable response (feel free to use this response):”Extend adjusted balances of revenue and expense accounts from the Adjusted Trial Balance columns to the Income Statement columns.”  Respond to the questions relating to which accounts are extended to the Statement of Retained Earnings columns and the Balance Sheet columns, similarly.

        Also, be advised of an error in the text and pdf file; wherein the Credit Column of the Balance Sheet is MISSING in Ex. 20, p. 195. The missing balance sheet credit accounts and amounts can be observed in the Adjusted Trial Balance Credit column.

        Question 3: Here is the correct response to the first of the four basic steps performed at the end of each accounting period (feel free to use this response and then list the remaining three steps): “1) Closing the Revenue accounts”

        In the next part of u03a2 proficient-level question, you are asked to explain why the closing process is so important. Respond to question by addressing nominal (temporary) accounts.

        Question 4: The following relates to the Distinguished-level question. On page 86-87 of the text, the accounting cycle steps are listed, but not necessarily in the actual order of completion. On page 88, Exhibit 7 (and on page 193, Exhibit 19) the steps are listed with loops, wherein the certain items in this exhibit (numbers 6, 7, & 8) loop around and can be completed prior to the final output step (listed as number5.) Accordingly, because of the possibly confusing presentation of this material, the following is the correct order of the accounting cycle steps and should be used to correctly respond to this distinguished-level question:

        1) Transactions are analyzed & recorded in the general journal

        2) Transactions are posted to the ledger

        3) An unadjusted trail balance is prepared

        4) An optional  end-of-period work sheet is prepared

        5) Adjustment data is assembled & analyzed

        6) Adjusting entries are journalized

        7) An adjusted trial  balance is prepared

        8) Financial statements are prepared

        9) Closing entries are journalized & posted to the ledger

        10) A post-closing trial balance is prepared


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