Understanding Accounting
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ACC 300 · Meeting 3 · Tue 9/8

Statements and closing entries

47 slides · Unit 1 · Optional Kieso: Chapter 1, sections 1.1-1.2; Chapter 2, sections 2.1-2.4 · Meeting overview

Lecture

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  1. Slide 1. Before class
  2. Slide 2. Statements and closing entries
  3. Slide 3. The reporting system and the accounting cycle
  4. Slide 4. Class 2 adjustment: update two ledger balances
  5. Slide 5. Class 2 adjustment: post to the ledger
  6. Slide 6. Accounting cycle: financial statements and closing
  7. Slide 7. Learning objective for this meeting
  8. Slide 8. Preparing the three linked statements
  9. Slide 9. Red Cedar adjusted trial balance
  10. Slide 10. Income statement: what it reports
  11. Slide 11. Red Cedar: adjusted trial balance to income statement
  12. Slide 12. iClicker question 1 of 5
  13. Slide 13. iClicker answer 1 of 5
  14. Slide 14. Statement of stockholders’ equity: the components
  15. Slide 15. Equity rollforwards: Retained Earnings and AOCI
  16. Slide 16. Red Cedar: a Retained Earnings rollforward
  17. Slide 17. Equity rollforwards: contributed capital
  18. Slide 18. Red Cedar statement of stockholders’ equity
  19. Slide 19. Red Cedar: adjusted trial balance to balance sheet
  20. Slide 20. iClicker question 2 of 5
  21. Slide 21. iClicker answer 2 of 5
  22. Slide 22. Connecting the financial statements
  23. Slide 23. A complete set of financial statements
  24. Slide 24. Multiple-step income statement structure
  25. Slide 25. Capitol Sign adjusted trial balance
  26. Slide 26. Capitol Sign statement-building practice
  27. Slide 27. Capitol Sign income statement
  28. Slide 28. Capitol Sign statement of stockholders’ equity
  29. Slide 29. Capitol Sign balance sheet
  30. Slide 30. Statement of cash flows: classify cash transactions
  31. Slide 31. iClicker question 3 of 5
  32. Slide 32. iClicker answer 3 of 5
  33. Slide 33. Which accounts close?
  34. Slide 34. Closing temporary accounts: three steps
  35. Slide 35. Red Cedar revenue closing entry
  36. Slide 36. Red Cedar expense closing entry
  37. Slide 37. Red Cedar dividend closing entry
  38. Slide 38. Capitol Sign closing-entry practice
  39. Slide 39. Capitol Sign closing-entry practice: answer
  40. Slide 40. iClicker question 4 of 5
  41. Slide 41. iClicker answer 4 of 5
  42. Slide 42. Capitol Sign post-closing trial balance
  43. Slide 43. Balances at the start of the next period
  44. Slide 44. iClicker question 5 of 5
  45. Slide 45. iClicker answer 5 of 5
  46. Slide 46. Accounting cycle: finish the period
  47. Slide 47. Where the rules come from

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Contents

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Retrieve the adjusted balances from Class 2 Slides 1–5

  1. 1 Before class
  2. 2 Statements and closing entries
  3. 3 The reporting system and the accounting cycle
  4. 4 Class 2 adjustment: update two ledger balances
  5. 5 Class 2 adjustment: post to the ledger

Locate the final accounting-cycle steps Slides 6–7

  1. 6 Accounting cycle: financial statements and closing
  2. 7 Learning objective for this meeting

Build Red Cedar's linked statements Slides 8–24

  1. 8 Preparing the three linked statements
  2. 9 Red Cedar adjusted trial balance
  3. 10 Income statement: what it reports
  4. 11 Red Cedar: adjusted trial balance to income statement
  5. 12 iClicker question 1 of 5
  6. 13 iClicker answer 1 of 5
  7. 14 Statement of stockholders’ equity: the components
  8. 15 Equity rollforwards: Retained Earnings and AOCI
  9. 16 Red Cedar: a Retained Earnings rollforward
  10. 17 Equity rollforwards: contributed capital
  11. 18 Red Cedar statement of stockholders’ equity
  12. 19 Red Cedar: adjusted trial balance to balance sheet
  13. 20 iClicker question 2 of 5
  14. 21 iClicker answer 2 of 5
  15. 22 Connecting the financial statements
  16. 23 A complete set of financial statements
  17. 24 Multiple-step income statement structure

Build a second linked statement set Slides 25–32

  1. 25 Capitol Sign adjusted trial balance
  2. 26 Capitol Sign statement-building practice
  3. 27 Capitol Sign income statement
  4. 28 Capitol Sign statement of stockholders’ equity
  5. 29 Capitol Sign balance sheet
  6. 30 Statement of cash flows: classify cash transactions
  7. 31 iClicker question 3 of 5
  8. 32 iClicker answer 3 of 5

Close the period and evaluate the post-closing balances Slides 33–45

  1. 33 Which accounts close?
  2. 34 Closing temporary accounts: three steps
  3. 35 Red Cedar revenue closing entry
  4. 36 Red Cedar expense closing entry
  5. 37 Red Cedar dividend closing entry
  6. 38 Capitol Sign closing-entry practice
  7. 39 Capitol Sign closing-entry practice: answer
  8. 40 iClicker question 4 of 5
  9. 41 iClicker answer 4 of 5
  10. 42 Capitol Sign post-closing trial balance
  11. 43 Balances at the start of the next period
  12. 44 iClicker question 5 of 5
  13. 45 iClicker answer 5 of 5

Return to the accounting cycle and central takeaway Slides 46–47

  1. 46 Accounting cycle: finish the period
  2. 47 Where the rules come from