In your initial post, consider the steps in the accounting cycle. In what order do you think the financial statements should be produced? Specifically, does the position of the closing entries make sense to you as described in the textbook, or does it make more sense to produce the statements in the order described in Milestone One, in which the closing entries are completed before the income statement? Why or why not?
Then, in your follow-up posts, discuss your experiences working on Milestone One of the final project. Has the reading and homework prepared you for this work? What have been the challenges so far?
Sample Solution
Analyze Transactions: In this step, all relevant business transactions are gathered and analyzed to see if they have an effect on the financial statements. This involves examining source documents such as invoices, purchase orders, and bank statements to determine which accounts should be debited or credited.