PREFACE

This accounting practice set has been prepared for use in conjunction with Chapter 3, “The Accounting Information System,” from Intermediate Accounting, by Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield. It has been designed as a student's review and update of the accounting cycle and the preparation of financial statements that are covered in the traditional first-year principles of financial accounting course. It is a review of elementary accounting and an application of the contents of Chapter 3 of Intermediate Accounting; it should be used at the beginning of intermediate accounting, not at the end.

Two versions of this practice set are provided. The first version uses the periodic inventory method; the second version of the practice set, starting on page 77, uses the perpetual inventory method.

Completion of this practice set requires (1) analyzing transactions, (2) journalizing transactions, (3) posting to the general ledger and two subsidiary ledgers, (4) preparing year-end adjusting entries, (5) using a ten-column work sheet, (6) preparing financial statements, and (7) closing the accounts. The required portion of this practice set should take between 11 to 14 hours to work. The optional assignment (number 12, preparation of a statement of cash flows) takes an additional 1 to 1½ hours to work.

An alternative set of instructions is contained on pages 17-19 and is to be worked only if assigned by the instructor in place of the instructions on pages 14-16. ...

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