{"id":126,"date":"2024-09-06T16:46:41","date_gmt":"2024-09-06T16:46:41","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-preparing-financial-statements\/"},"modified":"2024-09-09T17:55:11","modified_gmt":"2024-09-09T17:55:11","slug":"introduction-to-preparing-financial-statements","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-preparing-financial-statements\/","title":{"raw":"Introduction to Preparing Financial Statements","rendered":"Introduction to Preparing Financial Statements"},"content":{"raw":"

What you'll learn to do:\u00a0Use an adjusted trial balance to prepare financial statements<\/h2>\r\n\"StepLet's look back at the questions we asked when you first met Nick Frank and his business at the end of October:\r\n
    \r\n \t
  1. How much money did Nick make or lose during his first month in business?<\/li>\r\n \t
  2. Nick wants to buy another truck for $5,000 in order to keep up with demand\u2014does he have enough cash in the bank to do that right now?<\/li>\r\n \t
  3. How much do customers owe Nick?<\/li>\r\n \t
  4. How much does Nick owe to his suppliers?<\/li>\r\n \t
  5. What is Nick's equity in his business at the end of October?<\/li>\r\n<\/ol>\r\nNow we should be able to answer these questions by creating some basic financial statements from the adjusted trial balance.\r\n\r\n \r\n\r\n
    \r\n

    The Accounting Cycle<\/h3>\r\n
      \r\n \t
    1. Analyze Transactions<\/li>\r\n \t
    2. Prepare Journal Entries<\/li>\r\n \t
    3. Post Journal Entries<\/li>\r\n \t
    4. Prepare Unadjusted Trial Balance<\/li>\r\n \t
    5. Make Adjusting Journal Entries<\/li>\r\n \t
    6. Prepare Adjusted Trial Balance<\/li>\r\n \t
    7. Prepare Financial Statements<\/li>\r\n \t
    8. Prepare Closing Entries<\/li>\r\n \t
    9. Prepare Post-Closing Trial Balance<\/li>\r\n \t
    10. Create and Post Reversing Entries, if needed<\/li>\r\n<\/ol>\r\n<\/section>","rendered":"

      What you’ll learn to do:\u00a0Use an adjusted trial balance to prepare financial statements<\/h2>\n

      \"StepLet’s look back at the questions we asked when you first met Nick Frank and his business at the end of October:<\/p>\n

        \n
      1. How much money did Nick make or lose during his first month in business?<\/li>\n
      2. Nick wants to buy another truck for $5,000 in order to keep up with demand\u2014does he have enough cash in the bank to do that right now?<\/li>\n
      3. How much do customers owe Nick?<\/li>\n
      4. How much does Nick owe to his suppliers?<\/li>\n
      5. What is Nick’s equity in his business at the end of October?<\/li>\n<\/ol>\n

        Now we should be able to answer these questions by creating some basic financial statements from the adjusted trial balance.<\/p>\n

         <\/p>\n

        \n

        The Accounting Cycle<\/h3>\n
          \n
        1. Analyze Transactions<\/li>\n
        2. Prepare Journal Entries<\/li>\n
        3. Post Journal Entries<\/li>\n
        4. Prepare Unadjusted Trial Balance<\/li>\n
        5. Make Adjusting Journal Entries<\/li>\n
        6. Prepare Adjusted Trial Balance<\/li>\n
        7. Prepare Financial Statements<\/li>\n
        8. Prepare Closing Entries<\/li>\n
        9. Prepare Post-Closing Trial Balance<\/li>\n
        10. Create and Post Reversing Entries, if needed<\/li>\n<\/ol>\n<\/section>\n","protected":false},"author":6,"menu_order":12,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Introduction to Preparing Financial Statements\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":114,"module-header":"- Select Header -","content_attributions":[{"type":"original","description":"Introduction to Preparing Financial Statements","author":"Joseph Cooke","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/126"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/users\/6"}],"version-history":[{"count":2,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/126\/revisions"}],"predecessor-version":[{"id":512,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/126\/revisions\/512"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/parts\/114"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/126\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/media?parent=126"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=126"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/contributor?post=126"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/license?post=126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}