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Fi Report Chap 2 - Part 2 - Coggle Diagram
Fi Report Chap 2 - Part 2
6) Prepare financial statement from an adjusted trial balance
1) Income statement
Revenue accounts
find on the trial balance "revenues"
Expense accounts
find on the trial balance "expense" except for cost of goods sold
-> to arrive at
Net income
2) Statement of stockholders' equity
--> decreased by dividends
--> Start with beginning balance of $0
--> Issuance of common stock
from
Common stock accounts
--> Net income (determined from income statement) increases retained earnings
Retained earnings accounts
--> find
total common stock
/
total retained earning
/ --> to then have
total stockholders' equity
3) Balance sheet
Asset Account
Liability accounts
Equity accounts
Retained earnings
balance is 0 when unadjusted
Adjustment to net earning = net income
Put in the ending balances that we commuted above for c
ommon stock
and
retained earning
in the balance sheet
7) Prepare and post close entries and prepare a post-closing trial balance
Goal is to transfer balance from temporary account to
permanent account