Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance...

Question

Question

Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements.

Answer 1

Answer #1

The flow of accounting information can be understood from below -

Identify business events, analyze these transactions, and record them as journal entries.
Post journal entries to applicable T-accounts or ledger accounts
Prepare an unadjusted trial balance from the general ledger
Analyze the trial balance and make end of period adjusting entries
Post adjusting journal entries and prepare the adjusted trial balance
Use the adjusted trial balance to prepare financial statements
Close all temporary income statement accounts with closing entries
Prepare the post closing trial balance for the next accounting period
Prepare reversing entries to cancel temporary adjusting entries if applicable

Answer 2

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