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Review of the Accounting Process


Chapter 1 explained that the primary means of conveying financial information to investors, creditors, and other external users is through financial statements and related notes. The purpose of this chapter is to review the fundamental accounting process used to produce the financial statements. This review establishes a framework for the study of the concepts covered in intermediate accounting.

Actual accounting systems differ significantly from company to company. This chapter focuses on the many features that tend to be common to any accounting system.



Analyze routine economic events-transactions-and record their effects on a company's financial position using the accounting equation format.

Record transactions using the general journal format.

Post the effects of journal entries to T-accounts and prepare an unadjusted trial balance.

Identify and describe the different types of adjusting journal entries.

Determine the required adjustments, record adjusting journal entries in general journal format, and prepare an adjusted trial balance.

Describe the four basic financial statements.

Explain the closing process.

Convert from cash basis net income to accrual basis net income.





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