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Megan is the managerial accountant of Shield Corp. and has to prepare the financial statements for...

Megan is the managerial accountant of Shield Corp. and has to prepare the financial statements for the current year. Discuss the steps that Megan should take prior to the preparation of the requisite financial statements of the company.

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Answer #1

Answer :-

Explanation :-

●First, Megan should gather and examine source documents-checks, credit card receipts, sales slips, and other related evidence concerning specific transactions.

●Second, Megan should record each financial transaction in a journal, which is a time-ordered list of account transactions.

●Third, Megan should transfer the information from her journal into a ledger, a book or a computer program with separate files for each account, through a process known as posting.

At the end of the accounting period, Megan should prepare a trial balance, which is a summary of the balances of all the accounts in the general ledger.

If, upon totaling, the trial balance doesn't balance, Megan should look for mistakes and correct them.

●If the trial balance is correct, Megan can then prepare the financial statements, which is the fourth and final step of the accounting cycle.

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