About This Chapter
Adjusting Accounts & Preparing Financial Statements - Chapter Summary
Give your employees an overview of account adjustment and financial statement preparation topics with this useful online financial accounting training chapter. These simple lessons go over the applications of preparing financial statements in business as well as a variety of related concepts, such as:
- Periodic reporting
- Accrual accounting
- Temporary accounts
- Post-closing trial balance
The chapter is accessible whenever your employees have time to study, and they can submit questions to our accounting experts if they need any help with the material. We've also included short quizzes to help employees reinforce their understanding of these accounting topics.
How It Helps
- Builds awareness: The lessons in the chapter help employees become aware of the steps that are involved in the preparation of financial statements.
- Distinguishes differences: Your employees can discover the primary differences between various accounting methods and account types.
- Strengthens accounting skills: Employees who complete the chapter will know how to prepare financial statements and adjusted trial balances.
By the end of the chapter, your employees should be able to:
- Explain the time period principle and the functions of periodic reporting
- Make financial statements more useful through accrual accounting
- Differentiate between cash-basis and accrual accounting
- Compare types of account adjustments
- Interpret examples of revenues and accrued expenses
- Explain how adjusted trial balances and financial statements are prepared
- Recognize the differences between temporary, permanent, real and nominal accounts
- Outline the steps to the closing entry process
- Discuss the purpose and preparation of post-closing trial balance
1. Periodic Reporting & the Time Period Principle
Time plays a very important role in accounting and financial reporting. In this lesson, you will learn why time is important as we discuss periodic reporting and the time period principle.
2. Using Accrual Accounting to Make Financial Statements More Useful
What is the relationship between the financial statements and accrual accounting? Do you know? By the time this lesson is over, you will not only know what the relationship is between the two but also why that relationship is important.
3. The Differences Between Accrual & Cash-Basis Accounting
There are two accounting methods that companies can choose from when deciding how they want their books done. They are cash basis and accrual basis. In this lesson, you will learn the differences between the two.
4. Account Adjustments: Types, Purpose & Their Link to Financial Statements
Accounting is a multi-step process. In this lesson, we will discuss adjusting entries. You will learn what they are, why they are important, and see examples.
5. Accrued Expenses & Revenues: Definition & Examples
Accruals are a part of the accounting world for most businesses. In this lesson, you will learn about two important parts of the concept of accruals: accrued revenue and accrued expenses.
6. Adjusted Trial Balance: Definition, Preparation & Example
There are many steps in the accounting cycle that must be taken before a company's financial statements are prepared. In this lesson, we will be discussing one of those steps - creating an adjusted trial balance.
7. Preparing Financial Statements
Financial statements are the most sought after reports in the financial industry. In this lesson, you will learn how to prepare them using information found on the adjusted trial balance.
8. Practical Application: Preparing Financial Statements
The preparation and publication of financial statements is one of the most important functions of almost any organization. This scenario will provide you an opportunity to prepare the financial statements for a fictional company.
9. Temporary & Permanent Accounts: Definition & Differences
Accounts are classified in a variety of ways in accounting. In this lesson, you will learn about two types of account classifications: temporary and permanent accounts.
10. Closing Entries: Process, Major Steps, Purpose & Objectives
The accounting cycle is a multi-step process. In this lesson, you will learn about part of that process: making closing entries. You will learn what closing entries are, what accounts are affected, and how they are made.
11. Real Accounts vs. Nominal Accounts: Definition, Differences & Examples
In accounting, there is a classification for everything. Transactions, financial statements, and accounts are broken down into classifications. In this lesson, we will be discussing two classifications of accounts - real accounts and nominal accounts.
12. Post-Closing Trial Balance: Preparation & Purpose
The last step in the accounting process is to create the post-closing trial balance. In this lesson, you will learn what the post-closing trial balance is, why it's important, and what accounts appear on it.
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