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.