25 Mar You will answer questions about the accounting cycle and prepare general journal entries. Introduction Have you looked at the b
- You will answer questions about the accounting cycle and prepare general journal entries.
Introduction
Have you looked at the balance sheet or income statement of companies like Apple, Microsoft, Google, Amazon, or Facebook? What is their cash situation? How much profit are they making? What is their stock price? Investors and market participants examine such information on regular basis through a company’s financial statements.
When an organization reports its financial results to the world, the external users look to see if the organization made any money during its most recent year. Will the assets the organization owns, minus the debts it owes, result in any leftovers that can be put back into the organization to make more money, or reward the shareholders for their investment in the organization?
You have studied the business language of accounting and financial statements, and now you will explore the accounting cycle and its first few steps, including:
- Recording of business transactions.
- Using general journal entries.
- Learning how a trial balance is used to prove the work completed in the first few steps in the accounting cycle.
- Overview
In this assessment, you are required to answer questions about the accounting cycle and prepare general journal entries.
Preparation - Use the Assessment 2 Template [XLSX] to complete this assessment.
- Review all suggested readings.
- Note: Accuracy in accounting is paramount. Take your time and double-check your work for errors or omissions.
Instructions
Step 1: Describe the accounting cycle with specified details.
Step 2: Create required journal entries.
Complete both parts using the Assessment 2 Template.
Part 1: Accounting Cycle
Respond to the short-answer questions found in the template on the Accounting Cycle tab using proper grammar and language.
Part 2: Journal Entries
Prepare specified journal entries.
Save and submit your completed template in the courseroom.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria: - Competency 1: Define accounting terminology and its application to accounting principles.
- Describe the accounting cycle with specified details.
- Competency 3: Prepare financial statements from accounting system data.
- Create required journal entries.
- Competency 4: Convey purpose, in an appropriate tone and style, incorporating supporting evidence and adhering to organizational, professional, and scholarly writing standards.
- Convey clear meaning through appropriate word choice and usage.
Part 1 – Accounting Cycle
| BUS-FPX3061 Assessment 2 Template | |
| PART 1: Accounting Cycle | |
| Respond to the following eight questions using grammatically correct language. | |
| 1. Describe the steps in recording and posting the effects of a business transaction and provide some examples of source documents used in these steps. | [Answer here] |
| 2. Which steps in the accounting cycle are performed throughout the accounting cycle? | [Answer here] |
| 3. Which of the steps in the accounting cycle are performed only at the end of the accounting period? | [Answer here] |
| 4. What is the purpose of the "dividends" account and under what circumstances would this account be increased? | [Answer here] |
| 5. What are the rules of debit and credit for accounts appearing on a firm's balance sheet and income statement? | [Answer here] |
| 6. Describe the nature and purposes of the general journal, ledger, and chart of accounts. | [Answer here] |
| 7. What are the purposes of an unadjusted trial balance? Describe the types of accounts that would appear on this type of trial balance. | [Answer here] |
| 8. If you found that the total of the debits column of the trial balance for a company is $200,000, while the total of the credits column is $180,000, what are some possible causes of this difference? | [Answer here] |
Part 2 – Journal Entries
| PART 2: Journal Entries | |||
| Create appropriate journal entries for each of the following business events. Fill in the yellow cells in columns B, C, and D as appropriate. | |||
| Cash. | |||
| Prepaid insurance. | |||
| Land. | |||
| Buildings. | |||
| Equipment. | |||
| Accounts payable. | |||
| Unearned service revenue. | |||
| Owner's capital. | |||
| Owner's drawings. | |||
| Service revenue. | |||
| Advertising expense. | |||
| Salaries and wages expense. | |||
| 1-May | Invested $20,000 cash in the golf course business. | ||
| 3-May | Purchased Hampstead Golf Land for $15,000 cash. The price includes land $12,000, shed $2,000, and equipment $1,000. | ||
| 5-May | Paid advertising expenses of $700. | ||
| 6-May | Paid cash $600 for a one-year insurance policy. | ||
| 10-May | Purchased golf discs and other equipment for $1,050 from Discs Are Us, payable in 30 days. | ||
| 18-May | Received $1,100 in cash for golf fees earned (service revenue). | ||
| 19-May | Sold 150 coupon books for $10 each. Each book contains four coupons that enable the holder to play one round of disc golf. | ||
| 25-May | Withdrew $800 cash for personal use. | ||
| 30-May | Pay $250 as salaries for part-time employees. | ||
| 30-May | Paid Discs Are Us the full amount due. | ||
| 31-May | Received $2,100 cash for fees earned. | ||
| Note: The first two rows below are an example for cash. | |||
| Date | Accounts | Debit | Credit |
| 1-May | Cash | $20,000 | |
| Owner's Capital | $20,000 | ||
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