The Accounting Cycle

On Your Test

You will be expected to know the following for multiple-choice concept questions. Almost all questions will relate to these things:

The order of the accounting cycle

What is reported on the trial balance – adjusted and unadjusted

Which accounts are permanent

Which accounts are temporary or nominal

What is the purpose of an adjusting entry

What is the purpose of a closing entry

Which trial balance is used to prepare financial statements

What is reported on the post closing trial balance

Which accounts are “closed”

You will be asked to do the following on problems and multiple-choice problems that require calculations. It boils down to this:

Prepare adjusting entries

Prepare a trial balance – unadjusted – adjusted – post closing

Prepare closing entries

Determine the ending balance of retained earnings