Introduction

This course is a continuation of Intermediate Accounting I and provides students with an in depth look at generally accepted accounting principles and procedures so that they properly account for and present information in financial statements prepared for external users. Topics covered in this course include: revenue recognition, current liabilities and contingencies, long-term liabilities, investments, leases, pensions, income taxes, shareholders’ equity, taxes, earnings per share and the statement of cash flows.

For this week’s lesson we will be reviewing the various component parts of the Accounting Cycle and the Accounting Information System. The information is this lesson was covered in detail in ACCTG 211 and ACCTG 471.

We will start off by gaining an understanding of basic accounting terminology, including an explanation of the double-entry rules of accounting. Next we will identify and discuss the steps that make up the accounting cycle. We will then cover how to record transactions in the general journal, how to post entries to the respective ledger accounts, and review the preparation of a trial balance.

Further, our lesson for this week will identify and explain the reasons for preparing adjusting entries, discuss how to prepare the various financial statements from the “adjusted” trial balance, and discuss the rationale for preparing period end closing entries.

Learning Objectives

At the end of this lesson, you will be able to do the following:

• review basic accounting terminology;
• explain the double-entry rules of accounting;
• define, interpret, and learn the basic steps in the accounting cycle;
• review and practice how to record transactions in journals, post to general ledger accounts, and prepare a trial balance;
• explain and understand the purpose and procedures for preparing adjusting journal entries;
• prepare, interpret, and analyze how to prepare financial statements from the adjusted trial balance; and
• review and understand how to prepare period-end closing entries.

Lesson Readings & Activities

By the end of this lesson, make sure you have completed the readings and activities found in the Lesson 1 Course Schedule.