Nt1310 Unit 1 Assignment 1

Discussion Assignment 2

In the realm of accounting, transactions follow a structured process known as the accounting cycle, a practical and applicable framework. This cycle, consisting of five essential stages, is designed to record, summarize, and report financial activities in a systematic manner (Silberschatz et al., 2011). 1. What is the difference between a. and a. Analysis and Recording: This is where transactions are identified, analyzed, and recorded in the accounting system. It involves determining which accounts are affected and by how much. 2. What is the difference between a'smart' and a'smart'? Posting to Ledger: Once transactions are recorded, they are posted to the respective ledger accounts (Silberschatz et al., 2011). Ledgers …show more content…
This is a summary of all the ledger account balances at a specific point in time. 4. What is the difference between a.. Adjusting Entries: Adjusting entries are created at the conclusion of the accounting period to ensure that revenues and expenses are accurately recorded within the appropriate period. This step ensures that the financial statements accurately reflect the company's financial position (Averkamp, n.d.). 5. What is the difference between a'smart' and a'smart'? Financial Statements and Closing Entries: Financial statements are prepared using the adjusted account balances. Closing entries reset temporary accounts (revenue, expense, and dividend accounts) to zero in preparation for the next accounting period (Nate, 2023). Let us go through an example to illustrate these stages: Example: Company ABC sells $6,000 worth of products to a customer on credit. 1. What is the difference between a. and a. Analysis and Recording: The accountant at Company ABC identifies the sale and records it in the accounting system. The accountant debits Accounts Receivable (an asset account) by $6,000 and credits Sales Revenue (a revenue account) by $6,000. 2. What is the difference …show more content…
3. What is the difference between a'smart' and a'smart'? Trial Balance: At the end of the accounting period, a trial balance is prepared. This trial balance list lists all accounts and their balances. Accounts Receivable would have a balance of $6,000, and Sales Revenue would also have a balance of $6,000. 4. What is the difference between a.. Adjusting Entries: Adjusting entries are performed at the conclusion of the accounting period (Averkamp, n.d.). Let us say the accountant realizes that customers have returned $600 worth of products. Adjustable entry is made to reduce both Accounts Receivable and Sales Revenue by $600 (Nate, 2023). 5. What is the difference between a'smart' and a'smart'? Financial Statements and Closing Entries: Financial statements (such as income statements and balance sheets) are prepared with adjusted balances. Once the financial statements are prepared, closing entries are made. In this case, Sales Revenue and any other revenue accounts would be debited to bring their balances to zero, while Retained Earnings would be credited for the same amount. Similarly, any expenses incurred during the period would be credited to bring their balances to zero, while Retained Earnings would be debited

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