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Unit 1 · 6 lessons

The Accounting Cycle

Revisit the full accounting cycle at a Grade 12 level: the GAAP framework behind every entry, the bodies that set and enforce the rules, merchandising in a computerized system, adjusting, closing and reversing entries, and the ethical and technological issues reshaping the profession.

  • 61 practice questions
  • 46 flashcards
  • 2 interactive lessons
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Lessons

  1. 1GAAP Principles in PracticeGAAP is a framework of qualities, assumptions and principles that tells an accountant how to turn a real event into a number, and each principle drives a specific, recurring recording decision.10 questions
  2. 2Who Sets and Enforces the RulesIn Canada, CPA Canada and CPA Ontario govern the profession, the AcSB sets accounting standards (ASPE for private enterprises, IFRS for publicly accountable ones), the OSC enforces public-company disclosure in Ontario, the CRA administers tax, and independent auditors check the statements.10 questions
  3. 3The Accounting Cycle in a Computerized SystemThe accounting cycle is the same for service and merchandising businesses and for paper or software; software automates posting, trial balances and statements, while the accountant still analyzes transactions, makes adjusting entries and reviews the results.Interactive10 questions
  4. 4Adjusting Entries and the Matching PrincipleAdjusting entries, made at the end of each period, move revenue and expenses into the period they belong to; each one pairs a balance-sheet account with an income-statement account and applies the matching or revenue recognition principle.Interactive10 questions
  5. 5Closing and Reversing EntriesClosing entries reset revenue, expense and drawings accounts to zero and transfer the period's net income and drawings into Capital; optional reversing entries on the first day of the new period undo accrual adjustments so routine transactions can be recorded normally.10 questions
  6. 6Ethics, Fraud and Current IssuesFinancial statements are only useful if they are honest; this lesson covers ethical decision-making, the fraud triangle and internal controls, common earnings manipulation and off-balance-sheet schemes, global convergence to IFRS, and how technology is changing the profession.11 questions