Unit 7
Accounting and Finance Foundations Unit 7: Financial Statements 606Financial Statements
Chapter 18
Student Guide
2.3.9Lesson 18.7 Review of the Accounting Cycle:
Putting it all TogetherImagine, once again, that you are the accountant for Mrs. King’s Interior Design Services. Mrs. King
started her business on December 1, 20YY. During the accounting period ending in December 31, 20YY,
you completed the following steps of the accounting cycle:Step 1 of the accounting cycle: You analyzed source documents.Step 2 of the accounting cycle: You posted the transactions in the general journal using the chart of
accounts. Here they are:King’s Interiors Assets = Liabilities + Stockholder’s EquityKing’s Interiors Chart of Accounts
110 Cash
120 Accounts Receivable
130 Supplies
210 Accounts Payable
310 Capital, Mrs. King
320 Owner’s Draw, Mrs. King
330 Income Summary Account
410 Revenue, Design Services
420 Revenue, Design Products
510 Rent Expense
520 Utilities ExpenseExample 112/01/20YY Mrs. King deposited $30,000.00 to open her business account.
12/05/20YY Mrs. King bought glass shelves for displays for $2,500.00 on account.
12/07/20YY Mrs. King bought supplies for $400.00 cash.
12/07/20YY Mrs. King received payment for designing services $3,000.00.
12/09/20YY Mrs. King completed a design for Star Bank and agreed to be paid later. $5,000.00.
12/15/20YY Mrs. King wrote a check for $500.00 to pay for December’s rent.
12/20/20YY Mrs. King sent a check to Displays Inc. for $1,000.00 to pay on her account.
12/21/20YY Mrs. King withdrew $600.00 to get a makeover.
12/21/20YY Mrs. King contributed a computer worth $500.00 to the business.
12/21/20YY Mrs. King paid her December utility bill for $200.00.
12/23/20YY Mrs. King bought an antique desk for her office for $5,000.00 on account.
12/29/20YY Mrs. King received a check from Star Bank to pay on their account. $2,500.00.
12/29/20YY Mrs. King bought a calculator for $250.00.
12/30/20YY Mrs. King bought some office furniture for $2,000.00 cash.