ACCT-290 – Class Discussions Questions

ACCT-290 – Class Discussions Questions

1. For Week 3 we will study the remaining three steps
   in the Accounting Cycle: 7. Preparing the Financial statements, 8.
   Journalize and Post Closing Entries, 9. Prepare a post-closing trial
   balance. How do the different steps affect the financial statements? What
   is the effect on the financial statements of missing a step when
   completing the accounting cycle?
2. Step 7 of the Accounting Cycle is preparing the Financial Statements. There is a specific
   order that the Financial Statements need to be prepared. Discuss the specific
   order and explain why it is important.
3. Step 8 of the Accounting Cycle is to journalize and post
   the closing entries. What are the four closing journal entries? In your
   opinion, why are these necessary?
4. Check out Appendix 4A on page 195-196 of the e-book. In your opinion, what is the main
   purpose and benefits of a financial statement worksheet in assisting with the
   completion of the accounting cycle? Note that a using a worksheet is optional.
5. How would you describe the difference between the operating cycles of a Service Company and that of a Merchandising Company? What accounts would a merchandising company have in its
   chart of accounts that would be different from a service-based company?
6. What is the difference between a perpetual inventory system and a periodic inventory system? Pick one and discuss the advantages and disadvantages.
7. One unique aspect of merchandising financial statements is the Cost of Goods Sold
   account. How would you calculate cost of goods sold at the end of an accounting
   period under a periodic inventory system? What items make up cost of goods
   sold?
8. What is the difference between a single step income statement and a multiple step income statement?
   What are the advantages and disadvantages of each? If you were a business
   owner, which type would you prefer to use?

Answers can be up to 70 words each.

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A financial statement is a report that shows the financial activities of an organization and the organization’s financial position. There are steps that are followed in making an effective financial statement. If these steps are not done effectively they have an effect of providing the wrong picture of the financial statements. If they are followed correctly, this enables the financial statements to be correct.

            All the steps in the accounting cycle are interdependent and they should be followed correctly without missing….

APA

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