ASIAN INSTITUTE OF SCIENCE AND TECHNOLOGY

BALIWAG BRANCH
ACCOUNTING CYCLE JOMAR V. VILLENA, CPA
1. Analyzing the business transactions
2. Journalizing the business transactions
3. Posting to the ledger
4. Preparation of Trial Balance
5. Preparation of Adjusting Entries
6. Preparation of Adjusted Trial Balance
7. Preparation of Financial Statement
8. Preparation of Closing Entries
9. Preparation of Post-Closing Trial Balance
10. Preparation of Reversing entries

ILLUSTRATION 1:

DATE ACCOUNT DEBIT CREDIT

Aug 2 Cash 60,000
Ben Capital 60,000

5 Cash 150,000
Note Payable 150,000

9 Supplies 2,700
Accounts Payable 2,700

11 Prepaid Rent 12,000

Cash 12,000

14 Accounts Receivable 26,3000

Service Income 26,300

22 Cash 14,000
Accounts Receivable 14,000

25 Advertising Expense 3,500

Cash 3,500

27 Accounts Payable 2,700

Cash 2,700

31 Utilities Expense 2,200

Cash 2,200

BUSINESS MATH Page 1 of 2

 ASIAN INSTITUTE OF SCIENCE AND TECHNOLOGY
BALIWAG BRANCH
ACCOUNTING CYCLE JOMAR V. VILLENA, CPA
ADJUSTING ENTRIES:
Characteristics of Adjusting Entries
1.
2.
3.

Examples of Adjusting Entries

1.
2.
3.
4.
5.
6.

DATE ACCOUNT DEBIT CREDIT

DEC 31 Depreciation Expense 6,000
Accumulated Depreciation 6,000

31 Rent Expense 1,000

Prepaid Expense 1,000

31 Utilities Expense 2,700

Utilities Payable 2,700

31 Accounts Receivable 72,000

Service Income 72,000

31 Bad Debts Expense 2,200

Allowance for Bad Debts 2,200

BUSINESS MATH Page 2 of 2