Describe elements of the accounting environment and prepare an income statement, balance sheet, and statement of retained earnings. Imagine you are trying to grow your business by attracting investors, clients, or securing a loan. You'll need to tell a compelling story that demonstrates your understanding of business finance and the language it speaks—the language of accountants. Accounting is often called the language of business, and rightfully so, because effective business organizations set up an accounting information system to communicate data to help internal and external stakeholders make better decisions. Reporting the results of an organization's business transactions to these stakeholders requires the preparation of financial reports such as a balance sheet (statement of financial position), retained earnings, and income statements. Accurate preparations of these statements require essential accounting knowledge and skills. In this assessment, you are required to:
Answer questions designed to test your knowledge of the basic accounting environment.
Prepare income, balance, and retained earnings statements.
For Parts 2–4: Imagine that you have been given June 20XX financial transaction data provided by Moonlight Drive-In Theater and have been asked to prepare specified financial statements. This information is found in the Assessment 1 Template [XLSX] Download Assessment 1 Template [XLSX].
Instructions
Complete each of the following assessment parts in sequence using the Assessment 1 Template [XLSX] Download Assessment 1 Template [XLSX]. All parts of the template should be submitted together. Each template tab corresponds to one of the following assessment parts:
- Part 1: Accounting Environment.
- Respond to the short-answer accounting environment questions found in the template on the Accounting Environment tab using proper grammar and language.
- Part 2: Income Statement.
- Prepare an income statement for June 20XX. Make sure to identify account names and amounts.
- Part 3: Statement of Retained Earnings.
- Prepare a statement of retained earnings for June 20XX, using the information in Part 2.
- Part 4: Balance Sheet.
- Prepare a balance sheet as of June 30, 20XX, using the information in Part 2. Make sure to identify account names and amounts.
Save and submit your completed template in the courseroom.