Conceptual

Explain the importance of periodic reporting and the time period principle. Explain accrual accounting and how it improves financial statements. Identify steps in the accounting cycle. Explain and prepare a classified balance sheet.

Analytical

Explain how accounting adjustments link to financial statements. Compute profit margin and describe its use in analyzing company performance. Compute the current ratio and describe what it reveals about a company's financial condition.

Procedural

Prepare and explain adjusting entries. Explain and prepare an adjusted trial balance. Prepare financial statements from an adjusted trial balance. Describe and prepare closing entries. Explain and prepare a post-closing trial balance. Appendix 3A—Explain the alternatives in accounting for prepaids. Appendix 3B—Prepare a work sheet and explain its usefulness.