Join our accounting class, every day period 7/8.
1. Collect and Verify source documents
- You must collect financial documents and verify them
- examples of financial documents include; invoices, receipts, memorandums, and check stubs
2.Analyze each transaction
- You have to look at each business transaction and decide which are credit and which are debit
3. Journalize each transaction
- You record the credits and debits in their column in the general journal.
4.Post to the ledger
- You post each journal entry to the general ledger.
5.Prepare a trial balance
- a trial balance is a proof of the equality of total debits and credits
6.Prepare a work sheet
- a worksheet summarizes the financial information for the accounting period
7.Prepare financial statement
- This is the step where you prepare the Income Summary Statement, Statement of Changes in Owner's Equity, and the Balance Sheet.
8.Journalize and post closing entries
- This is where you record and post your closing entries to close out all the temporary accounts.
9.Prepare a post-closing trial balance
- This is the last step of the accounting cycle. This is also where you make sure your total credits equal your total debits.
Profit Versus Loss
EXXON Mobil - Profit
$33.6 billion in profits in 2015
Radioshack - Loss
What used to be an electronic store that you could find in every town now is hard to find due to the company operating at a loss and declaring bankruptcy.
Amazon - Equilibrium
Amazon has been in business close to 20 years and still have not made a major profit or had a major loss