Back to course 'BUS103: Introduction to Financial Accounting'

Topic outline

  • Unit 4: Completing the Accounting Cycle

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    So far, you've learned how to process the raw data of the transactions that happen in a business entity into useable information in the form of the financial statements. This unit will explain how to review and summarize the accounting cycle and prepare the income statement, the statement of retained earnings, and the balance sheet. All businesses have to prepare financial statements, both for internal decision making, and for external stakeholders (including the IRS!), so understanding this important concept is critical for any manager.

    Completing this unit should take you approximately 5 hours.

    • Upon successful completion of this unit, you will be able to:

      • explain the closing process for the accounting cycle;
      • perform the necessary closing entries;
      • describe the process for preparing a post-closing trial balance; and
      • create an income statement and balance sheet from the adjusted trial balance.

    • 4.1: Completing the Accounting Cycle

      • book icon
        Completing the Accounting Cycle Book
        Students must
        Mark as done

        This chapter will explain the steps required to complete the accounting cycle. This includes understanding the full accounting information cycle, and what is used to create the financial statements that will be provided to required and interested stakeholders. The accounting cycle happens every month for most companies, and requires distinct steps and cutoffs in order to create useful, consistent financial reports that managers can use to make decisions that improve the performance of the company. On a quartery and annual basis, financial statements are created for outside stakeholders as well.

    • 4.2: The Closing Process

    • Unit 4 Assessment

      • book icon
        Practice Problems Book
        Students must
        Mark as done

        Complete these practice problems. Check your answers after you finish.

      • quiz icon
        Unit 4 Assessment Quiz
        Students must
        Receive a grade

        Take this assessment to see how well you understood this unit.

        • This assessment does not count towards your grade. It is just for practice!
        • You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
        • You can take this assessment as many times as you want, whenever you want.