Steps in Foundation Studies 2 Prac

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Steps in Foundation Studies 2 Prac

  1. 1. Foundation Studies 2 <br />Practical Questions<br />
  2. 2. 1 Process Balance Day Adjustments<br />Process the adjustment<br />Increase or decrease expense or revenue (display the adjusted amount in the list of accounts)<br />Raise the adjustment account (add to the bottom of the list of accounts)<br />Unearned revenue<br />Accrued revenue<br />Prepaid expense or<br />Accrued expenses<br />Complete the General Journal entry<br />
  3. 3. 2 Closing Entries<br />Complete the closing entries in the General Journal<br />Debit Revenue/Credit P&L Summary a/c<br />Credit Expense/Debit P&L Summary a/c<br />
  4. 4. 3 Calculate Profit/Loss<br />Deduct total expenses from total revenues to determine profit or in some instances loss<br />Complete the double entry in the General Journal<br />If a profit<br />Debit the P&L Summary/Credit Capital<br />If a loss <br />Debit Capital/Credit the P&L Summary<br />
  5. 5. 4 Transfer Drawings to Capital<br />Complete a General Journal entry to perform the transfer<br />Debit Capital/Credit Drawings<br />
  6. 6. 5 Ledger<br />Complete the following accounts:<br />Profit & Loss Summary <br />Capital and<br />Drawings accounts<br />
  7. 7. Income Statement<br />Complete the statement using the expenses and revenues<br />Make sure you use the ‘adjusted amounts’ for expenses and revenues<br />
  8. 8. Balance Sheet<br />Complete the balance sheet using the assets, liabilities and owner’s equity for the question<br />Make sure you add the following accounts to the Asset section<br />Prepaid Expenses<br />Accrued Revenues<br />Make sure you add the following accounts to the Liabilities section<br />Accrued Expenses<br />Unearned Revenues<br />

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