ACCT1006 Module 3

Describe the nature and purpose of the adjusted trial balance

The adjusted trial balance is a report that lists the balances of all general ledger accounts after adjustments have been made. Its purpose is to ensure that total debits equal total credits after recording all financial transactions, providing a basis for preparing financial statements. Nature:
A financial report listing all account balances after adjusting entries are made at the end of the accounting period.

Explain the purpose of closing entries

To reset temporary accounts (revenues, expenses, and dividends) to zero at the end of the accounting period, so they’re ready to record transactions in the next period. This helps update retained earnings in the equity section.

Describe the required steps in the accounting cycle

• Identify and analyze transactions

• Record journal entries

• Post to the ledger

• Prepare unadjusted trial balance

• Make adjusting entries

• Prepare adjusted trial balance

• Prepare financial statements

• Make closing entries

• Prepare post-closing trial balance

Describe the purpose and the basic form of a worksheet

Purpose:
To organize and summarize accounting data before preparing financial statements; helps ensure accuracy in adjustments and balances.

Basic Form:
A multi-column sheet with sections for:

• Trial Balance

• Adjustments

• Adjusted Trial Balance

• Income Statement

• Balance Sheet