SUSQUEHANNA EQUIPMENT

RENTALS

Formulated by:
Areesha Mohammad Jawed – BBA-IIB-191003
Asra Khan – BBA-IIIA-181011
Muhammad Usman Ansari – BBA-IIB-191009
Noman Rasheed – BBA-IIB-191011
Muhammad Alam – BBA-IIB-191093
 ABOUT US

 Founded by John and Patty Driver in 2011, who started a rental corporation
intended for providing various equipment's named “Susquehanna Equipment
Rentals”.
 This new corporation was able to begin operations immediately by purchasing
the asset and taking over the location of Rent-It, an equipment rental company
that was going out of business soon.
 The corporation performs adjusting entries monthly. And closing entries are
performed annually on December 31.
THE ACCOUNTING CYCLE
 STEP 1 – ANALYZING TRANSACTIONS

 Before you record any transactions, you need to analyze each of them
thoroughly and determine where each entry needs to be placed accurately.
 You will need to note down that events, whether internal (dealings within the
firm/organization) or external (financial interactions with parties outside the
company) are measurable.
 This analysis will give you a basis for recording.
 STEP 2 – JOURNALIZING ENTRIES

 After evaluating the nature of events, you proceed to record the transaction in
a journal or general journal.
 Each journal entry will consist of amounts that are debits and credits, the
transaction(s) date, and the explanation of the transaction(s).
 STEP 3 – POSTING LEDGER ACCOUNTS

 Transferring the information from the journal or general journal to the ledger
accounts ensures that the company has a complete record of all the accounting
transactions in a given period of time.
 The information that is recorded in the general ledger is what is used to create
a company’s financial statements.
 STEP 4 – UNADJUSTED TRIAL BALANCE

 The unadjusted trial balance is a list of the company’s accounts and balances at
a given time, before any adjusting entries have been made in order to create
financial statements.
 Debit balances are listed in the left column, while credit balances are in the
right.
 The totals of these columns must be equal (match) to each other.
 STEP 5 – ADJUSTING ENTRIES

 Adjusting entries are recorded at the end of an accounting period to

amend/rectify the final balances of numerous general ledger accounts.
 These amendments are made to more closely align the reported results and the
actual financial position of a company.
 Adjustments to entries follows the principles of matching and revenue
recognition.
 The idea is to recognize the events that led to revenue generation and
expenditure, while closing all the already-balanced accounts.
 An adjusted trial balance only leaves relevant accounts and makes way for the
financial statements.
 STEP 6 – ADJUSTED TRIAL BALANCE

 The adjusted trial balance shows the balance of all the accounts including the
adjusted accounts at the end of the accounting period.
 The end result of this step in the accounting cycle will help demonstrate the
effects of the financial events that happened during the particular reporting
period for a company or an organization.
 STEP 7 – FINANCIAL STATEMENTS

 One of the last phases of the accounting cycle is the preparation of the
financial statement—a record of a company’s financial condition, its results
and its cash flow.
 A typical organization has three primary financial statements.
 First, there is the income statement, also known as the profit and loss account,
which shows the company’s revenue and expenses.
 Second, there is the balance sheet, also called the statement of financial
position, which contains all liabilities, equities and assets of the company.
 Third, there is the statement of cash flows, which shows your company’s
liquidity and shareholding.
 STEP 8 – CLOSING ACCOUNTS

 At the end of a fiscal year, a company completes its accounting cycle.

 In this step of the accounting cycle, temporary balances are reduced to zero in
order to prepare the accounts for the following year’s transactions.
 The balances at the year-end will form the basis for the next fiscal year, as the
opening balances.
 STEP 9 – POST-CLOSING TRIAL BALANCE

 The only accounts that remain in your books are the permanent entries: assets,
liabilities, and owners’ equity.
 This balance demonstrates the evidence that a company has correctly followed
the accounting cycle, since its closing entries were properly journalized and
accurately posted.
THANK YOU FOR YOUR
COOPERATION!