4.1: Learning objectives

After studying this chapter, you should be able to:

• Summarize the steps in the accounting cycle.

• Prepare a work sheet for a service company.

• Prepare an income statement, statement of retained earnings, and balance sheet using information contained in the work sheet.

• Prepare adjusting and closing entries using information contained in the work sheet.

• Prepare a post-closing trial balance.

• Describe the evolution of accounting systems.

• Prepare a classified balance sheet.

• Analyze and use the financial results—the current ratio.