Introduction to Business Accounting

Explore the role of a bookkeeper and what they do, identify career types in this environment, and outline the key traits, skills, and employment outlook for success.

Record financial transactions in the general journal, post to accounts, maintain source documents, reconcile to subsidiary ledgers, and generate reports using accounting software or manual systems.

Explore the many potential careers for a bookkeeper, from running an independent bookkeeping business to roles in banks, accounting firms, information services companies, payroll, and the audit field.

Learn the core functions of a professional bookkeeper, from posting transactions in accounting software and Excel to generating reports, maintaining internal controls under Sarbanes-Oxley, and supporting management inquiries.

Identify required traits for bookkeepers, including analytical skills, accuracy, attention to detail, integrity, confidentiality, proficiency with accounting systems, spreadsheets, software, and basic arithmetic.

Bookkeepers and accountants always have jobs across many markets with solid median pay and growth of 10–11 percent annually. Gain on-the-job training by starting in a company before going solo.

Discover the bookkeeper's role in business, potential careers, and how company size shapes duties from full charge to partial tasks; learn essential skills and the strong 10% employment outlook.

Explore the nature of business and accounting, including partnerships, corporations, and sole proprietorships, the role of accounting and ethics, and an introduction to GAAP with the cost and matching principles.

Define a business as an organization that provides goods or services to earn a profit. Not-for-profit entities aim to distribute services rather than earn profits, sometimes selling products for funding.

Explore the three main types of businesses: service, merchandising or retail, and manufacturing. See examples such as plumbers, merchandising or retail businesses, and manufacturers producing items like cars or clothing.

Record daily financial transactions in a systematic and rigorous process for a business. Analyze the entered data and summarize it into reports that help end users make solid management decisions.

Identify internal users such as managers and external users such as stockholders or bankers; accurately record activities to avoid garbage in, garbage out; tailor reports for users.

Compare managerial and financial accounting, highlighting internal decision support with ad hoc, analytical reports versus strict external reporting, and learn core statements: income statement, balance sheet, retained earnings, cash flows.

Explore why ethics and integrity matter in accounting, and why it's critical that bookkeepers and accountants maintain ethical behavior at all times.

Ethics in accounting protects accuracy for critical business decisions, safeguards confidential information, and guides professionals when faced with pressure to misstate transactions, as seen in Enron and Arthur Andersen.

Identify the issue using your personal ethical standards, evaluate consequences for others, consider obligations to those affected, and make your final ethical decision in accounting.

Discover the generally accepted accounting principles (GAAP) guiding what and when to record transactions, focusing on the business entity, matching, cost, objectivity, and unit of measure principles.

The business entity principle requires keeping the business and owner separate, including separate checking accounts. Cash belongs to the owner or to the business, not mixed.

Examine sole proprietorships, partnerships, and corporations—and how ownership and rights separate from management, with corporations, though 20 percent of firms, generating about 90 percent of revenue.

The matching principle requires that revenues be recorded when goods are delivered or services are completed, and expenses be matched in the same period.

Explains revenue recognition, cost, objectivity, and unit of measure principles, and demonstrates the matching principle with a Starbucks example to show deferring February and March expenses to April revenue.

Explore the nature and types of business—proprietorships, partnerships, and corporations—and recognize how accounting, ethics, and GAAP guidance, including the cost principle and mastering principle, shape financial results.

Explore the accounting equation and the details of recording business transactions, then gain an introduction to the financial statements.

Explore the fundamental accounting equation and balance sheet, showing how assets equal liabilities plus equity and how double-entry accounting keeps these two sides in balance.

Define the accounting equation: assets equal liabilities plus equity, with assets as resources owned to earn revenue, such as cash, accounts receivable, and equipment; liabilities include accounts payable.

Explore the distinction between stockholder's equity and owners equity, and learn how investments by owners and revenues increase equity. Withdrawals and expenses decrease it.

Investments from the owner increase business equity while withdrawals reduce it; revenues raise and expenses lower equity, illustrated by a ketchup bottle example showing net income and net loss.

Define a business transaction as an economic event recorded by the accounting system, and distinguish internal from external events with examples like cash sales, rent, salaries, and owner withdrawals.

Examine examples to distinguish internal transactions from external transactions, and decide which examples belong to each category.

Explore how bakeries classify external vs internal transactions, capitalize inventory like flour as an asset, apply the matching principle to expense usage, and recognize owner withdrawals as external.

Apply the matching principle by recording expenses when incurred and matching them to revenue. Explore accounts payable, accounts receivable, and prepaid expense shaping asset and liability timing.

Learn how revenue and expense accounts categorize earnings, with examples like fees earned, rent earned, and interest earned; use the sales account for merchandise sales, and choose specific revenue names.

Identify revenues such as fees earned, rent revenue, and interest earned, and recognize sales for retail or manufacturing. Describe descriptive expense accounts like rent expense, utilities, salaries, and office supplies.

Company A records a revenue transaction with accounts receivable when selling office supplies on credit to be paid in 30 days; Company B expenses supplies immediately and records accounts payable.

Learn how transactions affect the accounting equation by increasing or decreasing elements while keeping sides in balance, and how stockholders' equity evolves with investments, revenues, expenses, dividends, and retained earnings.

Summarize monthly, quarterly, and yearly transactions into financial statements used by managers, owners, stockholders, external parties, and banks, following generally accepted accounting principles.

Explore the balance sheet, income statement, and cash flow statement and how a single transaction can affect all three, why they are linked, and how each covers different timeframes.

Explains balance sheet snapshot of assets, liabilities, and equity alongside income statements, retained earnings, stockholders' equity, and cash flow statements to assess a company's financial health and cash flow.

Identify how revenue, listed as fees earned, minus total expenses (wages, rent, supplies, utilities, miscellaneous) yields net income of 10,000, which is carried to the retained earnings statement.

Explain how beginning owner's equity of $30,000 grows by $10,000 net income and is reduced by $5,000 owner's draw, yielding ending equity of $35,000.

the balance sheet shows assets, liabilities, and equity as of a single point in time. assets total 36000 and assets equal liabilities plus equity 36000, with accounts payable 1000.

Learn how the cash flow statement tracks cash receipts and payments. See how operating, investing, and financing activities drive net cash flows that reconcile with the balance sheet.

Analyze a cash flow statement with operating, investing, and financing activities. Recognize positive operating cash flow as essential and interpret financing land purchases through owner funds versus operating cash.

Show how net income from the income statement flows to the owner's equity statement and the balance sheet, with cash balances matching the cash flow statement.

Review the accounting equation, classify accounts into assets, liabilities, and equity, and introduce the core financial statements: balance sheet, income statement, statement of owners equity, and cash flow statement.

Analyze transactions using the accounting equation to see how each entry affects it. Learn to use accounts and ledgers, double-entry accounting, and posting to the general ledger.

Explore the accounting equation by linking assets to liabilities and owners equity, and learn how cash, accounts receivable, and equipment balance with accounts payable and the proprietorship's capital.

See how a $15,000 cash investment in a new business affects the accounting equation by increasing assets (cash) and owners' equity (capital) to keep the equation balanced.

Record a purchase of equipment on credit that increases equipment assets and accounts payable liabilities. This keeps the accounting equation balanced.

Record a $3,300 credit sale of plumbing services, increasing accounts receivable and revenue to boost owner's equity while keeping assets equal to liabilities plus owner's equity.

This lecture demonstrates collecting cash from a receivable and paying off an accounts payable, updating cash, receivables, and accounts payable, and maintaining the assets equals liabilities plus owners equity balance.

Explore how the accounting equation stays in balance through double-entry accounting, and learn how asset accounts like cash show increases and decreases.

Identify the left side of every account as the debit side in T-accounts, establishing the basic structure of accounting.

Learn how debits and credits operate in t-accounts, with debits on the left and credits on the right, and how each account type increases or decreases.

Explore how the general ledger records all transactions as a group of accounts used by a business entity, and learn the chart of accounts, a list of all ledger accounts.

Explore the chart of accounts, showing assets, liabilities, stockholders' equity, and revenues and expenses with named accounts, numbers, and cross-references.

Explore the classification of accounts by descriptive purpose, distinguishing tangible assets (cash, land, buildings, equipment, inventory) from intangible assets (copyrights, trademarks, patents) and their value, rights, and obligations.

Identify short-term and long-term liabilities, including accounts payable, wages payable, bonds payable, and mortgage, and explain unearned rent becoming earned rent over time.

Explore stockholders' equity and owner's equity accounts, including net assets, investments, retained earnings, dividends, and the draw account across corporations, partnerships, and proprietorships.

Identify revenue types such as fees earned, commissions earned, rent earned, sales, and interest earned. Apply the matching principle by recognizing expenses like supplies, repair and maintenance, salary, and depreciation.

Adopt the double-entry system by recording each transaction with debits and credits across at least two accounts, ensuring the assets equal liabilities plus equity and debits match credits.

Explore the double-entry system by applying the accounting equation assets equal liabilities plus stockholders' equity; debits increase assets while credits decrease them, and the reverse applies to liabilities and equity.

Explain how income statement revenue accounts increase with a credit and expense accounts increase with a debit, and how these movements affect owners' equity in the double-entry system.

Explore how the dividends account, a stockholder's equity account, decreases with credit and increases with a debit, reflecting dividends as an expense that reduces equity over time.

Understand normal balances in accounting using a cash asset example in a t account, showing debits increase cash and credits decrease it, and why assets have debit normal balances.

Engage in a knowledge check to identify the normal balances of asset, expense, revenue, liability, and equity accounts.

Asset and expense accounts increase with a debit and carry a debit balance; revenue, liability, and equity accounts increase with a credit and normal balances aid error detection.

Identify the normal balances for assets, liabilities, and stockholder's equity, showing that assets increase with a debit while liabilities and stockholder's equity increase with a credit.

Recognize that revenues increase with credits on income statement accounts and cannot have a debit balance, while expenses increase with debits, establishing the normal balance.

Record a starter transaction where an owner invests $10,000 cash, increasing cash and owner’s equity, and practice completing the remaining transactions to reinforce basic accounting debits and credits.

Learn how debits and credits drive cash, owner's equity, fees earned, accounts receivable, and utilities expense through practical knowledge-check transactions.

Learn to journalize transactions by recording them in the journal with debits and credits. Remember cash accounts increase with a debit and decrease with a credit, not positives or negatives.

Explore journalizing transactions by recording debits and credits, using cash and notes payable in a $50,000 loan and a $30,000 equipment purchase, with clear audit trails.

Walk through a step-by-step journal entry for a transaction: the date goes into the date column, and a $20,000 cash payment for a building purchase is recorded.

Record debits first and credits second in journalizing, placing the account name under the description; for March 15, use the buildings account.

Record a cash purchase of a building by debiting the building account for $20,000 and crediting the cash account.

Write a descriptive note for each journal entry to ensure clarity later, using the purchase storage garage example to illustrate how transactions are recorded.

Post journalized entries to the buildings and cash accounts, using account numbers and posting references to link journal pages with accounts for clear cross-referencing.

Analyze how a journal entry affects the accounting equation, specifically assets equal liabilities plus owner's equity. Debiting buildings and crediting cash offset each other, leaving liabilities and aggregate equity unchanged.

Record a cash receipt for services performed by X Y Z company on March 17, $10,000, highlighting the journal entry and why cash replaces accounts receivable when payment is received.

Record the cash debit in journalizing transactions, noting a $10,000 debit and describing the cash transaction. Cash increases with a debit in the debit column.

Identify fees earned as revenue when a service is performed and cash is collected, recording a $10,000 credit to fees earned.

Describe the transaction clearly to show that receiving client fees creates a cash debit, illustrating the journalizing step in recording the transaction.

Demonstrate journalizing by recording a $10,000 debit to cash and a $10,000 credit to fees earned, with posting references to the cash account and posting reference 70 for fees earned.

Record a cash receipt to show how assets and equity balance through revenue, recording a $10,000 debit to cash and a $10,000 credit to fees earned, liabilities unchanged.

Record the March 21st transaction for XY Z company: receiving five hundred dollars of office supplies on accounts payable due in 30 days.

Record the debit to office supplies, an asset, for $500 and specify the account and description.

Identify accounts payable as the liability used when paying later and record a credit in the credit column.

Record purchases of supplies on account, recognizing accounts payable and subsequent payments as part of journalizing transactions.

Post a 500 debit to the office supplies account and add posting reference 14. Record the 500 credit to accounts payable, account 40, and double-check for accuracy.

Explore how office supplies transactions affect assets and liabilities, show no impact on owner's equity, contrast asset vs expense treatment, and apply debits and credits under the matching principle.

Practice journalizing a multi-step transaction dated March 30, recording cash payments for rent and utilities totaling $1,300, and identifying cash as the account affected.

Record debits for rent expense and utility expense when paying two bills with cash, illustrating that a single journal entry can include multiple debits and credits.

Analyze journalizing cash transactions: record a 1300 cash outlay by crediting cash (an asset that decreases with a credit), and record as a single or two entries.

Record the payment of monthly expenses as a journal entry and describe the transaction. Continue with journalizing transactions by noting the monthly expenses as the description.

Post debits and credits to the rent expense (account 82) and cash (account 10), then add the posting reference.

Explains how a cash decrease of $3300 affects the accounting equation, with rent and utility expenses debited to balance debits and credits.

Record journal entries in Excel by analyzing transactions and applying debits and credits, including reversing and adjusting entries for accruals and prepaid items.

Recap how transactions affect the accounting equation, debits and credits, and the double-entry system. Learn how entries move from journals to the general ledger and prepare for posting into accounts.

Post debits and credits from the journal into ledger accounts, practice posting entries, and use trial balances to catch transpositions and other errors before horizontal analysis.

Learn how to post entries in a four-step process by recording debit and credit accounts with dates, amounts, and journal references, then practice applying these steps.

Post the building and cash accounts for a $20,000 building purchase on March 15, illustrating how to record and classify the transaction in posting entries.

Enter the date for the journal entry in the buildings account, as discussed in posting entries part 3, referencing the entry prepared on page 5 of the journal.

Post the debit to the buildings account and update its balance to a $20,000 debit, creating the new account balance.

Record the date and a $20,000 debit, update the new balance, and add the journal page as the posting reference to locate the entry on page 5.

Enter the account number in the journal posting reference column to cross-reference the building's account. Use posting references to locate entries and verify you posted to the correct account.

Learn how to post credits from journal entries to the cash account (account number 10), recording the date March 15th and ensuring entries go to the proper accounts.

Apply a $20,000 credit to a cash account with a $59,800 debit balance to arrive at a $39,800 cash balance.

Learn to add the posting reference to a journal entry on page 5 and record it in the posting reference and cash count.

Enter the cash account number in the posting reference to complete the general journal entry, then verify postings in the cash and buildings accounts for accuracy.

Practice posting journal entries to accounts, compare manual posting with automatic posting in accounting software, and reinforce understanding of behind the system processes through continued practice.

Record transaction B, receiving $10,000 for services, and examine the journal as it appears at the end of step four.

Post the March 17 cash debit of 10,000 to the cash account, update its balance to 49,800, and record the posting references to journal page 6 and account 10.

Post the $10,000 credit to the fees earned account (account 30) on March 17, recording a posting reference of six and establishing a $10,000 balance in this account.

Review how posting entries can produce errors, and use the trial balance to verify that debits equal credits and reveal posting mistakes during monthly, quarterly, or yearly closes.

Review the unadjusted trial balance by verifying normal balances, ensuring debits equal credits, and assessing postings for accuracy. Apply analytical skills to detect errors and judge reasonableness before adjustments.

Learn how manual data entry can cause errors and how to detect them by reviewing for an unbalanced trial balance, ledger accounts with incorrect normal balances, and overall balance plausibility.

Identify entering information errors such as transposition and slide errors, which affect the trial balance; review the journal entries to locate and correct the error.

Identify and correct errors outside the trial balance by checking posting references, verifying journal entries against postings, never erasing records, and using adjusting entries to preserve a clear audit trail.

Corrects a misposted cash purchase by reversing an erroneous accounts payable credit and posting the proper entry. Learn the correct journal entry: debit office supplies, credit cash.

Learn to use horizontal analysis to find errors by comparing current period figures to a base period, such as March versus February, to assess accuracy.

Compare the income statement items from February to March using horizontal analysis to detect errors, compute percent changes, and assess the reasonableness of net income.

Drop February balances for all income statement accounts, enter fees earned, rent, and utilities to compute net income, then repeat with March to compare results and verify accuracy.

Calculate month-over-month differences to identify why income and net income declined, with fees earned down $5,000 driving a $5,100 drop, and discuss with management or operations to assess causes.

Calculate percent changes using February as the base, identify revenue declines and rising rent, and flag potential double entries to verify fees earned and ensure accurate accounting.

Use horizontal analysis to quantify variances in dollars and percentages, assess reasonableness, and pursue missing or erroneous transactions through discussion with others to explain month-end numbers.

See a practical demonstration of balance sheet horizontal trend analysis, tracing monthly balances from January to April to uncover aging receivables, cash changes, and depreciation impacts.

Develop and analyze a horizontal income statement trend, using graphs to show revenue and expense movements to management. Apply accruals and correcting entries, including double rent.

Practice posting entries by transferring debits and credits from the journal to ledger accounts, and use horizontal analysis to verify trial balance fluctuations and identify errors.

Identify the purpose of the adjusting process and the types of accounts requiring adjustment, following a review of the adjusted trial balance.

Clarify the adjusting process by applying the revenue recognition principle and the matching principle to ensure revenue is recorded when earned and expenses are matched in the same period.

Execute the adjusting process by reviewing and updating accounts at period end, ensuring proper revenue and expense recognition and matched totals through journal entries before financial statements.

Compare cash basis and accrual basis accounting and how revenues and expenses are recognized. See why GAAP favors accrual accounting and how accounts receivable and accounts payable capture cash timing.

Learn how the adjusting process updates accounts when daily transactions aren't recorded, using monthly adjustments and accruals for time-based revenues and expenses such as prepaid rent and subscriptions.

Adjust prepaid expenses, unearned revenues, accrued revenue, and accrued expenses through the adjusting process, recognizing portions as expenses or revenue.

Adjust prepaid expenses from asset to expense; recognize earned revenue for unearned revenue; and accrue revenue and expenses with appropriate debits and credits.

Explain depreciation of fixed assets, or plant assets, such as buildings and equipment, noting land never depreciates and straight-line depreciation is recorded monthly as depreciation expense.

Use straight-line depreciation on a 45000 asset with a 15-year life, recording 3000 per year (250 per month) to match revenue, with lives set by GAAP and tax laws.

Learn the adjusting process and review five types of adjusting entries, and understand why we perform them on a monthly basis.

Practice making adjusting entries for prepaid expenses, accrued revenues, accrued expenses, and depreciation to align financial statements with the accrual basis of accounting.

Practice adjusting the prepaid expenses from an unadjusted trial balance by counting maintenance supplies, computing used amount from 700 to 275, and recording 425 as an expense.

Record adjusting entries for maintenance supplies by debiting the asset to increase and crediting to decrease, recognizing expense and reducing owners' equity while balancing the equation.

The lecture demonstrates how an adjusting entry reduces the maintenance supplies asset by 425, leaving an adjusted ending balance of 275 in the maintenance supplies account.

Debit the maintenance supply expense in the March 30 adjusting entry, raising the balance from zero to 425 after inventory.

Avoid omitting adjusting entries because it misstates expenses, assets, net income, and owners' equity, as shown by the $475 maintenance supplies example.

This lecture explains adjusting unearned rent revenue by splitting a $30,000 three-month rent into $10,000 monthly rental income, moving it from unearned rent to rental income as time passes.

Record the adjusting entry for a cash prepayment by crediting unearned rent, showing that cash received is not yet earned and remains a liability as of March 1.

At the end of March, perform adjusting entries by debiting unearned rent 10,000 and crediting rental revenue to record March earnings.

Adjust the unearned revenues account for rent by $10,000, moving it to earned revenue and reducing the balance from $30,000 to $20,000, with another $10,000 earned next month.

Demonstrates adjusting an unearned revenue entry to recognize $10,000 of rental revenue, updating the revenue account balance to $10,000 for the period.

Without this adjustment, revenue remains unrecorded as earned, causing revenue and net income to be understated by $10000, owner's equity to be understated, and liabilities to be overstated.

Recognize accrued revenues by recording revenue for work performed but not billed. Note that in March, eight thousand dollars of landscaping services were completed but not billed until April 2.

The lecture shows adjusting an accrued revenue on March 30 by debiting accounts receivable for 8000 and crediting fees earned, increasing assets and revenue while keeping the books balanced.

Increase the accounts receivable balance to 8000 and fees earned to 18000 through the March 30 adjustment. Prepare the updated balances for the adjusted trial balance.

Failing to accrue revenue understates revenues by $8,000. As a result, net income, owner's equity, and assets including accounts receivable are understated.

Recognize and record accrued wages expense of 13,250 for March and establish a wages payable liability for payment on April 1.

Record the accrued expenses with a debit to wage expense and a credit to wages payable, increasing liabilities without affecting assets.

Learn how to record accrued wages through an adjusting entry, debiting wage expense 13,250 to accrue March wages, changing the balance from 24,500 to 37,750.

Learn how reversing entries handle accrued expenses and accrued revenues, and how wages payable is adjusted at month end, with a March 1 reversal and a March 30 adjusting entry.

Not recording accrued expenses understates expenses and wages payable, overstating income and owner’s equity while understating liabilities; end-of-month accruals may involve multiple expenses and revenues.

Understand depreciation expense for fixed assets by using the contra asset account accumulated depreciation to show net asset value, aiding investors and creditors in assessments.

Demonstrate depreciation handling using straight-line method: record depreciation in accumulated depreciation rather than the asset, based on a $1,000 monthly rate for a building purchased five months ago.

Record depreciation with a $1,000 debit to depreciation expense and a $1,000 credit to accumulated depreciation, a contra asset offsetting the rental building in the accounting equation.

Explore depreciation expense through a March 30 adjusting entry, updating ending balance from 2,000 to 3,000 and accumulated depreciation from 5,000 to 6,000 in posting accounts.

Record depreciation by increasing the contra asset account against the building, leaving the original cost unchanged and showing on the balance sheet how much of the building has been used.

Compute a fixed asset's book value by subtracting accumulated depreciation in the contra account from its original cost, as shown: 80,000 minus 6,000 equals 74,000, with remaining life.

Explore depreciation expense and the consequences of failing to record it, showing how understated expenses lead to overstated net income, owner's equity, and overvalued assets on the financial statements.

Identify the five types of end-of-month adjusting entries, assess prepaid expenses, accrued items, and revenue recognition rules based on shipping terms and monthly depreciation.

Learn how to prepare adjusting entries, construct an adjusted trial balance, and use vertical analysis to verify the accuracy of financial information.

Adjust prepaid expenses at period end by debiting expense and crediting the asset, and debit the liability with a credit to revenue as work is performed.

Record accrued revenues by debiting accounts receivable and crediting revenue when earned; adjust accrued expenses by debiting expenses and crediting liabilities to reflect the matching principle.

Record depreciation as an adjusting entry by debiting depreciation expense and crediting accumulated depreciation. This matches asset cost with revenue and prevents net income and assets from being overstated.

Create the adjusted trial balance after posting adjusting entries to confirm current balances, ensure debits equal credits, and provide the final balances for financial statements.

Analyze an adjusted trial balance by confirming normal balances, including accumulated depreciation as a contra asset, and review the closing process that transfers net income to retained earnings.

Apply vertical analysis by comparing 2015 to 2014 and expressing expenses as a share of revenue. Examine wages, rent, depreciation, and other costs to spot trends and validate figures.

Begin vertical analysis by inserting the income statement balances from the trial balance for March 2014 and 2015.

Perform vertical analysis by dividing each revenue line by total revenue to reveal percentage contributions, illustrated by fees earned, rental revenue, and 100 percent of revenue in a single account.

Complete vertical analysis by dividing each expense account by total revenue and compare across the prior year to identify depreciation differences and potential data errors.

Ensure financial statements are accurate and complete to support sound management decisions. Verify daily that all transactions flow through the system, preventing errors and explaining any fluctuations.

Shows vertical analysis in Excel, calculating expenses as a percentage of total revenue, comparing 2014–2015 April for fees earned versus plumbing supplies, and interpreting fixed versus variable costs.

Review the five types of entries, verify debits and credits, and use the adjusted trial balance and vertical analysis to detect errors and missing information.

Explore what a worksheet is and why we use it, and how it lays out financial data in an easy, systematic way to help prepare financial statements.

Explore how a worksheet ensures accounting data accuracy through unadjusted and adjusted trial balances, debits equal credits, and its column structure feeding financial statements, even for manual systems.

verify that the unadjusted trial balance shows debits equal to credits and all normal balances are present. use this check as the first step in preparing a worksheet.

Apply adjustments directly on the worksheet, then record them in the general journal and post to all individual accounts, as part of preparing a worksheet.

Adjust the unadjusted trial balance to the adjusted trial balance, then verify debits equal credits and that accounts show their normal balances (debit increases, credit increases).

Carry the adjusted trial balance balances to the right column, moving assets to the balance sheet and revenue credits plus expense debits to the income statement.

Classify and transfer balance sheet items: assets like cash, accounts receivable; liabilities and retained earnings on the credit side; treat accumulated depreciation as credit and dividends or withdrawals as debit.

Introduce a worksheet as a practical tool for manual counting and preparing financial statements. Verify accuracy in automated systems and note that you will prepare one in the final module.