Completing The Accounting Cycle: IFRS 4th Edition
Completing The Accounting Cycle: IFRS 4th Edition
Completing The Accounting Cycle: IFRS 4th Edition
Chapter 4
Completing the
Accounting Cycle
Chapter Outline
Learning Objectives
LO 1 Prepare a worksheet.
LO 2 Prepare closing entries and a post-closing trial
balance.
LO 3 Explain the steps in the accounting cycle and how
to prepare correcting entries.
LO 4 Identify the sections of a classified statement of
financial position.
Trial Adjusting
Analyze Journalize Post
Balance Entries
Adjusted Post-Closing
Trial Financial Closing
Trial
Balance Statements Entries
Balance
2 1
3
Key:
1. Close Revenues to Income Retained
Summary. Dividends Earnings
2. Close Expenses to Income
Summary.
4
3. Close Income Summary to
Retained Earnings.
4. Close Dividends to Retained
Earnings.
7. Prepare financial
4. Prepare a trial balance
statements
Partial Schedule
GENERAL LEDGER
Cash No. 101
Date Explanations Ref. Debit Credit Balance
Oct. 1 J1 7,000 7,000
GENERAL LEDGER
Supplies No. 126
Date Explanations Ref. Debit Credit Balance
Oct. 1 2,500
Oct. 31 Adjusting entry J2 1,500 1,000
Nokia
Statement of Financial Position (partial)
(in millions)
Intangible assets
Capitalized development costs € 244
Goodwill 6,257
Other intangible assets 3,913
€10,414
Alphabet Inc.
Statement of Financial Position (partial)
(in thousands)
Long-term investments
Non-marketable equity investments $1,469
Siemens
Statement of Financial Position (partial)
(in millions)
Non-current liabilities
Long-term debt €14,260
Pension plans and similar commitments 4,361
Provisions 2,533
Deferred tax liabilities 726
Other non-current liabilities 2,752
€24,632
LO 4 Copyright ©2019 John Wiley & Son, Inc. 59
Current Liabilities (1 of 2)
• Obligations company has to pay within coming year
or its operating cycle, whichever is longer
• Common examples are accounts payable, salaries and
wages payable, notes payable, interest payable,
income taxes payable, and current maturities of long-
term obligations
• Liquidity - ability to pay obligations expected to be
due within the next year