You should read and take notes on Sections 5.1 through 5.11 of Chapter 5 on pages 190 through 231.
Section 5.1 provides chapter-specific learning objectives.
Section 5.2 gives another look at a potential employment opportunity for someone interested in the business of accounting.
Section 5.3 provides a brief summary of what you have learned from previous chapters and begins the introduction to the use of the accounting worksheet.
Section 5.4 provides more specific information on the use of the accounting worksheet. There are a series of steps provides to support your foundational understanding of how the worksheet should be established. You will be taken step by step through the functions that you have learned and how the worksheet can aid you in bringing it all together. This is accomplished by revisiting the MicroTrain company introduced earlier in the textbook. Illustrations are provided to support your connection to the previous information you have in the course up to this point.
Section 5.5 provides a worksheet that can be used to create your financial statements.
Section 5.6 explains how the accounting worksheet can be your source for making the adjusting entries. Be mindful of the fact that the worksheet is an informal document used to support your analysis of the accounting information; this document is not a part of the formal accounting process. Some people prefer to use the worksheet to prepare for the transferring of data into useful information. You are highly encouraged to learn the basics of using this worksheet. As you become more comfortable with the practices of accounting, you will then be in a position to decide whether or not you would use the accounting worksheet.
Section 5.7 discusses the term nominal account, which describes a temporary account. When you take your snapshot of a specific accounting period, it becomes necessary to address the nominal accounts. This section of the course explains this information.
Section 5.8 provides an analysis of how the recording and analyzing of financial accounting information has transitioned and broadened as a result of technology.
Section 5.9 makes a distinction between a balance sheet and a classified balance sheet. This will be your first introduction to the classified balance sheet.
Section 5.10 discusses and defines the current ratio as a firm's ability to pay off its current liabilities with its current assets. A basic standard suggests that a business should maintain a 2-to-1 ratio with regards to meeting its financial obligations. However, as you will learn in this section of the course, there are many variables that support what is best within a given business situation.
Section 5.11 will reinforce your understanding of accounting concepts. The solutions to the self-test are located on pages 250 and 251.