SUMMARY DISCUSSION OF THE ACCOUNTING SYSTEM AND CYCLE (Continued):
Taking a Trial Balance - Mathematically determining the equality of the debit and credit entries in a ledger.
Calculates the End of the Period Adjustment - Estimates by mathematics or statistics the debit or credit entries which would bring the accounts into balance at the end of the fiscal period.
Reconciliation - Detailed searches through original documents, supporting files and subsidiary accounts to trace transactions. This involves preparation of adjustment documents based upon the search, showing the cause or causes of disagreement and the items which should be considered to make them agree.
Preparation of Work Sheets - Information from account books is compiled on this form, which is used to:
Prove the mechanical accuracy of adjusting and closing entries outside
Serve as a guide in the making of formal adjusting and closing entries.
Facilitate the preparation of statements.
Closing the Books - Enters the authorized adjusting and closing entries prior
Takes a Post-Closing Trial Balance - Checks or proves accounts so that the accounts equate after the adjusting and closing entries have been made.
Prepares Accounting Statements - Researches accounting documents, records and books and prepares a report reflecting relationships between accounts. The form of the statement may vary requiring charts, tables, narrative or footnote comments.
Statement Analysis - Narrative interpretation of statement which may be made within the specified limitations established by management, and may include the identification and description of the reasons for differences within and among the date included.
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