Guided Notes | Introduction to Financial Accounting

Initial Steps of the Accounting Cycle

Initial Steps of the Accounting Cycle

The Accounting Cycle

The First Four Steps of the Accounting Cycle

1. Identify and Analyze Transactions
2. Record Transactions to Journal
3. Post Journal Information to Ledger
4. Prepare Unadjusted Trial Balance
Guided Notes | Introduction to Financial Accounting
Initial Steps of the Accounting Cycle

Review Debits and Credits for Accounts

SUPER LAUNDRY
Trial Balance
April 30, 2018
(IN MILLIONS) DEBIT CREDIT
Cash Asset / debit xxx
Accounts receivable Asset / debit xxx
Office supplies Asset / debit xxx
Prepaid insurance Asset / debit xxx
Equipment Asset / debit xxx
Accounts Payable Liability / credit xxx
Unearned cleaning revenue Liability / credit xxx
Common stock SE / credit xxx
Dividends SE / debit xxx
Cleaning revenue SE / credit xxx
Gas expense SE / debit xxx
Advertising expense SE / debit xxx ___
xxx xxx

The Trial Balance

● Reason for trial balance is to ensure that debits and credits add up: final amounts should be equal
● Unadjusted trial balance is adjusted throughout the year