The%20Accounting%20Process

1
The Accounting Process

• Sid Glandon, DBA, CPA
• Assistant Professor of Accounting

2
Basic Accounting Equation

• Assets Liabilities Owners Equity
• Owners Equity consists of
• Revenues and gains, less
• Expenses and losses, plus
• Contributions by owners, less
• Withdrawals by owners, plus or less
• Other comprehensive income

3
Accounting Cycle

• Transactions and/or events
• Journalize transactions and/or events
• Post transactions and/or events
• Preparation of unadjusted trial balance
• Preparation of adjusting journal entries
• Adjusted trial balance
• Preparation of financial statements
• Journalize adjusting journal entries
• Journalize closing journal entries
• Post adjusting journal entries
• Post closing trial balance

4
Permanent Accounts

• Assets
• Liabilities
• Owners Equity

5
Temporary Accounts

• Revenue
• Gains
• Expenses
• Losses

6
Conversion from Cash to Accrual Basis Accounting

• Cash receipts, less
• Cash disbursements
• Net cash
• Add
• Increases in current asset
• Decreases in current liabilities
• Subtract
• Decreases in current assets
• Increases in current liabilities
• Non cash charges (depreciation)