Remember, the accounting cycle is a process that takes raw transactions, adjusts them for accuracy, and organizes them into the Income Statement and Balance Sheet. Let's practice identifying where everything goes.

Engagement Message

Which statement shows profitability over a period, and which shows financial position at a point in time?

Type

Sort Into Boxes

Practice Question

You've completed the adjusting process. Now sort these adjusted account balances onto the correct financial statement.

Labels

• First Box Label: Income Statement
• Second Box Label: Balance Sheet

First Box Items

• Service Revenue
• Interest Expense
• Salaries Expense

Second Box Items

• Prepaid Insurance
• Accounts Payable
• Owner's Capital

Type

Swipe Left or Right

Practice Question

Does the following event require an adjusting entry at the end of the month? Swipe left for 'Yes' and right for 'No'.

Labels

• Left Label: Needs Adjusting Entry
• Right Label: Regular Transaction

Left Label Items

• Used one month of a prepaid 1-year insurance policy.
• Employees worked the last week of the month but will be paid next month.
• Earned interest on a bank account that has not yet been paid.

Right Label Items

• Received cash from a customer for a sale made today.
• Paid the monthly rent bill on the first of the month.