Basic Accounting Cycle for a Sole Proprietorship

NOTE: The accounts in the accounting cycle for a sole proprietorship are different from those used in a corporation

Instructions – Project will be done in Connect  – Refer to your schedule for due date. 

The business associated with the project opened its doors in October. Transactions for October and November have been recorded already and are in the unadjusted November trial balance.  You will record December transactions.  Please take into consideration the amounts recorded in October and November as well as the ones you will record for December when making adjusting journal entries.  December will be the first time financial statements will be prepared; therefore, you will have to think about October, November and December when adjusting the books.

Resources to complete the project

Sole Proprietor Accounting Cycle videos prepared by Professor Chauvin:

Sole Proprietor Debits and Credits

How Sole Proprietor Accounting Transactions Integrate with Financial Statements

Recording Journal Entries Through the Unadjusted Trial Balance Stage

From the Unadjusted Trial Balance to the Adjusted Trial Balance

HINT: Use T Accounts for the Income Summary Account and Owner’s Capital to avoid confusion in recording closing entries.

From Adjusted Trial Balance to Post Closing Trial Balance

 

Adjusting Journal Entries Instructions

AJE Depreciation

AJE Interest and Salary Accruals

AJE Prepaid Expenses

AJE Supplies

AJE Unearned Revenue

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