Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Revenues

Financial Accounting

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Revenues

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Multiple Choice

Once a trial balance has been prepared, the next step of the accounting cycle involves:

Preparing adjusting entries, such as those for accrued revenues

Posting transactions to the ledger accounts

Preparing the post-closing trial balance

Recording closing entries

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Verified step by step guidance

Understand the accounting cycle: The accounting cycle is a series of steps that ensure financial transactions are accurately recorded and reported. After preparing the trial balance, the next steps involve adjustments, closing entries, and preparing final reports.

Step 1: Preparing adjusting entries. Adjusting entries are made to account for accrued revenues, accrued expenses, prepaid expenses, and other items that ensure the financial statements reflect the true financial position of the company. For example, if revenue has been earned but not yet recorded, an adjusting entry is required.

Step 2: Posting transactions to the ledger accounts. This involves transferring the adjusting entries to the respective ledger accounts to update their balances. Ledger accounts are used to track individual financial transactions for each account.

Step 3: Recording closing entries. Closing entries are made at the end of the accounting period to transfer balances from temporary accounts (e.g., revenues, expenses) to permanent accounts (e.g., retained earnings). This resets the temporary accounts for the next accounting period.

Step 4: Preparing the post-closing trial balance. After closing entries are recorded, a post-closing trial balance is prepared to ensure that all temporary accounts have been closed and the ledger is balanced. This trial balance includes only permanent accounts.