world civilizations ap edition glossary of accounting

The other line items and amounts simply relate to totals and derived amounts within the statements.Ī listing of all accounts in use by a particular company is called the chart of accounts. In reviewing the following financial statements for Xao, notice that italics are used to draw attention to the items taken directly from the previously shown trial balance. The basic process is to transfer amounts from the general ledger to the trial balance, then into the financial statements: But, for now, a tentative set of financial statements could be prepared based on the trial balance. The next chapter reveals additional adjustments that may be needed to prepare a truly correct and up-to-date set of financial statements. For example, failing to record a transaction, recording the same transaction twice, or posting an amount to the wrong account would produce a balanced (but incorrect) trial balance.įinancial Statements From The Trial Balance

Be aware that a “balanced” trial balance is no guarantee of correctness. It is much better to be careful as one proceeds, rather than having to go back and locate an error after the fact.

If the trial balance fails to balance, an error has occurred and must be located. Since each transaction was journalized in a way that insured that debits equaled credits, one would expect that this equality would be maintained throughout the ledger and trial balance. Chapter 24: Analytics for Managerial Decision Making.Chapter 23: Reporting to Support Managerial Decisions.Chapter 22: Tools for Enterprise Performance Evaluation.Chapter 21: Budgeting – Planning for Success.Chapter 20: Process Costing and Activity-Based Costing.Chapter 19: Job Costing and Modern Cost Management Systems.Chapter 18: Cost-Volume-Profit and Business Scalability.Chapter 17: Introduction to Managerial Accounting.Chapter 16: Financial Analysis and the Statement of Cash Flows.Chapter 15: Financial Reporting and Concepts.

Chapter 14: Corporate Equity Accounting.Chapter 12: Current Liabilities and Employer Obligations.Chapter 11: Advanced PP&E Issues/Natural Resources/Intangibles.Chapter 10: Property, Plant, & Equipment.Chapter 6: Cash and Highly-Liquid Investments.Chapter 5: Special Issues for Merchants.Chapter 1: Welcome to the World of Accounting.

World civilizations ap edition glossary of accounting