ACCT 1010 - Principles of Accounting I
Lesson 4 - Chapter 4
Completing the Accounting Cycle

Lesson Overview and Competencies

In this lesson, you will complete the accounting cycle by recording closing entries and preparing a Post-Closing Trial Balance.  You will also be introduced to the work sheet and learn to prepare a Classified Balance Sheet.

You will build the following competencies in this lesson:

1. Identify the steps in the accounting cycle
2. Distinguish the accounts that are closed each accounting period and prepare a post-closing trial balance
3. Explain the difference between temporary and permanent accounts
4. Prepare closing entries
5. Identify the parts of a classified balance sheet and prepare a classified balance sheet
6. Prepare a work sheet and explain its usefulness

Learning Activities

• Read Chapter 4 of your accounting text.
• Print and review the instructional handout for Closing Entries.
• Complete the following Interactive Presentations in Connect.  To see the presentations, click the Expand arrow for Chapter 4 in Connect, then click the link for each presentation and click the Play button.
  • Preparing Closing Entries
  • Preparing a Classified Balance Sheet
  • Preparing Adjusting Entries
• Complete the following practice problems and check them against the solutions provided for the B Problems in Course Resources. See your textbook for problem instructions.  These problems are not required work but may be helpful to your progress toward lesson objectives.
  • P4-4B
• P4-5B

Assessments

• Take the Closing Entries Quiz.
• Complete the homework problems assigned in Connect. Click the Expand arrow for Chapter 4 in Connect, then click the Chapter Four Homework link.

Lesson Summary

In this lesson you completed the accounting cycle by recording closing entries and preparing a Post-Closing Trial Balance.  You also learned about the Worksheet and prepared a Classified Balance Sheet.  In the next lesson, you will be introduced to accounting for a merchandising company.