《会计英语》PPT课件.ppt

AccountingEnglish2017,1,Chapter2-2,AccountingCycle(Cont.),AccountingEnglish2017,2,Beforefinancialstatementscanbeprepared,theaccountsmustbereviewedtoensuretheyreflectthecorrectbalances;adjustmentswillbeneededtoadjustprepaymentsandunearnedamounts,andtorecordamortizationandaccruals.Theadjustedtrialbalanceisusedtopreparethestatements.Closingentriesarejournalizedandpostedinpreparationforthenextaccountingperiod.,AccountingEnglish2017,3,Needforadjustments,Thelifeofabusinessisdividedintoaccountingperiodssothatperiodicfinancialreportscanbepreparedandused.Adjustmentsattheendofeachperiodarenecessarytoupdatesomeoftheasset,liability,expense,andrevenueaccountsandtoshowtheeffectsofpreviouslyunrecordedinternaleconomiceventsofthebusiness.,AccountingEnglish2017,4,Revenue=CashreceivedExpense=CashpaidRevenueCashreceivedExpenseCashpaid,AccountingEnglish2017,5,Accrualandcashbasisaccounting,Accrualaccountingrequiresadjustmentsforprepaid,unearned,andaccrueditems;therefore,itreportsrevenueswhenearnedandexpenseswhentheexpirationofbenefitisincurred.Cashbasisaccountingdoesnotmakeadjustments;revenuesarerecordedwhencashisreceivedandexpensesarerecordedwhencashispaid.Thecashbasisofaccountingisnotgenerallyaccepted.,AccountingEnglish2017,6,Adjustingtheaccounts(step5),Adjustingentriesarejournalizedinthegeneraljournalandthenpostedintothegeneralledger.Adjustingentriesareusedto:chargetheexpiredportionofprepaidexpensestoExpensechargetheexpiredportionoffixedassetscosttoAmortization/Depreciationexpenseaccrueexpensesandrecordtherelatedliabilitiesrecognizeasrevenuestheearnedportionofunearnedrevenueliabilitiesaccruerevenuesandrecordtherelatedassets,AccountingEnglish2017,7,PrepaidExpenses,AccruedExpenses,UnearnedRevenue,AccruedRevenue,TypesofAdjustingEntries,Depreciation,AccountingEnglish2017,8,Entriestoprepaidexpenses,PriorPeriods,CurrentPeriod,FuturePeriods,TransactionPaidfutureexpensesinadvance(createsanasset).,EndofCurrentPeriod,AdjustingEntryRecognizeportionofassetconsumedasexpense,andReducebalanceofassetaccount.,Entriestoprepaidexpenses,AccountingEnglish2017,9,ExamplesInclude:DepreciationSuppliesExpiringInsurancePolicies,Entriestoprepaidexpenses,AccountingEnglish2017,10,Jan.1,Dec.31,$2,400InsurancePolicyCoveragefor12Months,$200MonthlyInsuranceExpense,OnJanuary1,Webb,Co.purchasedaone-yearinsurancepolicyfor$2,400.,AccountingEnglish2017,11,Entriestoprepaidexpenses,Initially,coststhatbenefitmorethanoneaccountingperiodarerecordedasassets.,AccountingEnglish2017,12,Entriestoprepaidexpenses,Thecostsareexpensedastheyareusedtogeneraterevenue.,AccountingEnglish2017,13,Entriestoprepaidexpenses,SOCICostofassetsusedthisperiodtogeneraterevenue.,SOFPCostofassetsthatbenefitfutureperiods.,AccountingEnglish2017,14,TheConceptofDepreciation,Depreciationisthesystematicallocationofthecostofadepreciableassettoexpense.,Depreciableassetsarephysicalobjectsthatretaintheirsizeandshapebutlosetheireconomicusefulnessovertime.,AccountingEnglish2017,15,TheConceptofDepreciation,Theportionofanassetsutilitythatisusedupmustbeexpensedintheperiodused.,Cash(credit),FixedAsset(debit),Ondatewheninitialpaymentismade.,Theassetsusefulnessispartiallyconsumedduringtheperiod.,Atendofperiod.,AccumulatedDepreciation(credit),DepreciationExpense(debit),AccountingEnglish2017,16,DepreciationIsOnlyanEstimate,DuringMayof20 x7,Baronesrepairshoppurchasedanequipmentwithausefullifeof50monthsfor$5,000cash.Usingthestraight-linemethod,calculatethemonthlydepreciationexpense.,AccountingEnglish2017,17,DepreciationIsOnlyanEstimate,Baronesrepairshopwouldmakethefollowingadjustingentry.,Contra-asset,AccountingEnglish2017,18,AccumulateddepreciationwouldappearontheSOFPasfollows:,Equipment$5,000Less:accumulateddepreciation1004,900,AccountingEnglish2017,19,EntriestoUnearnedRevenue,PriorPeriods,CurrentPeriod,FuturePeriods,TransactionCollectedfromcustomersinadvance(createsaliability).,EndofCurrentPeriod,AdjustingEntryRecognizeportionearnedasrevenue,andReducebalanceofliabilityaccount.,AccountingEnglish2017,20,EntriestoUnearnedRevenue,ExamplesInclude:AirlineTicketSalesSportsTeamsSalesofSeasonTickets,AccountingEnglish2017,21,EntriestoUnearnedRevenue.,Jan.1,Dec.31,$6,000RentalContractCoveragefor12Months,$500MonthlyRentalRevenue,OnJanuary1,Webb,Co.received$6,000inadvanceforaone-yearrentalcontract.,AccountingEnglish2017,22,EntriestoUnearnedRevenue.,Initially,revenuesthatbenefitmorethanoneaccountingperiodarerecordedasliabilities.,AccountingEnglish2017,23,EntriestoUnearnedRevenue.,Overtime,therevenueisrecognizedasitisearned.,AccountingEnglish2017,24,EntriestoUnearnedRevenue,SOCIRevenueearnedthisperiod.,SOFPLiabilityforfutureperiods.,AccountingEnglish2017,25,EntriestoAccruedExpenses.,PriorPeriods,CurrentPeriod,FuturePeriods,TransactionLiabilitywillbepaid.,EndofCurrentPeriod,AdjustingEntryRecognizeexpenseincurred,andRecordliabilityforfuturepayment.,AccountingEnglish2017,26,EntriestoAccruedExpenses.,ExamplesInclude:InterestWagesandSalariesPropertyTaxes,Hey,whendowegetpaid?,AccountingEnglish2017,27,EntriestoAccruedExpenses.,Monday,May29,Friday,June2,$3,000WagesExpense,OnMay31,Webb,Co.oweswagesof$3,000.PaydayisFriday,June2.,Wednesday,May31,AccountingEnglish2017,28,EntriestoAccruedExpenses.,Initially,anexpenseandaliabilityarerecorded.,AccountingEnglish2017,29,EntriestoAccruedExpenses.,SOCICostincurredthisperiodtogeneraterevenue.,SOFPLiabilitytobepaidinafutureperiod.,AccountingEnglish2017,30,EntriestoAccruedExpenses,Monday,May29,Friday,June2,$5,000WeeklyWages,LetslookattheentryforJune2.,Wednesday,May31,$2,000WagesExpense,$3,000WagesExpense,AccountingEnglish2017,31,EntriestoAccruedExpenses,Theliabilityisextinguishedwhenthedebtispaid.,AccountingEnglish2017,32,EntriestoAccruedRevenue,PriorPeriods,CurrentPeriod,FuturePeriods,TransactionReceivablewillbecollected.,EndofCurrentPeriod,AdjustingEntryRecognizerevenueearnedbutnotyetrecorded,andRecordreceivable.,AccountingEnglish2017,33,EntriestoAccruedRevenue,ExamplesInclude:InterestEarnedWorkCompletedButNotYetBilledtoCustomer,AccountingEnglish2017,34,EntriestoAccruedRevenue,Saturday,Jan.15,Tuesday,Feb.15,$170InterestRevenue,OnJan.31,thebankowesWebb,Cerestof$170.Interestispaidonthe15thdayofeachmonth.,Monday,Jan.31,AccountingEnglish2017,35,EntriestoAccruedRevenue,Initially,therevenueisrecognizedandareceivableiscreated.,AccountingEnglish2017,36,EntriestoAccruedRevenue.,SOCIRevenueearnedthisperiod.,SOFPReceivabletobecollectedinafutureperiod.,AccountingEnglish2017,37,EntriestoAccruedRevenue,Saturday,Jan.15,Tuesday,Feb.15,$320MonthlyInterest,$170InterestRevenue,LetslookattheentryforFebruary15.,Monday,Jan.31,$150InterestRevenue,AccountingEnglish2017,38,EntriestoAccruedRevenue,Thereceivableiscollectedinafutureperiod.,AccountingEnglish2017,39,Steps6and7:Theadjustedtrialbalanceandpreparationoffinancialstatements,Thesixthstepintheaccountingcycleisthepreparationofanadjustedtrialbalancetoprovetheequalityofdebitsandcreditsuponcompletionoftheadjustmentprocess.Theseventhstepintheaccountingcycleispreparingthefinancialstatementsusingtheadjustedaccountbalancesassummarizedontheadjustedtrialbalance.,SOCI,40,AccountingEnglish2017,RetainedEarningsStatement,41,AccountingEnglish2017,SOFP,42,AccountingEnglish2017,AccountingEnglish2017,43,Theworksheet,Aworksheetisatooltheaccountantusesattheendofanaccountingperiodtoshowtheeffectsoftheadjustmentsandorganizethedataforuseinpreparingfinancialstatementsandrecordingtheadjustingandclosingentries.Theworksheetisaninternalworkingpaperthatincorporatessteps4(unadjustedtrialbalance)through7(preparationoffinancialstatements)oftheaccountingcycle.,AccountingEnglish2017,44,Step8:Closingentries,ClosingthetemporaryaccountsattheendofeachaccountingperiodservestotransfertheeffectsoftheseaccountstotheproperownersequityaccountthatappearsontheSOFP.Italsogivestherevenue,expense,andwithdrawals(ordividendforacorporation)accountszerobalances,preparingthemforuseinthefollowingperiod.,AccountingEnglish2017,45,Step8:Closingentries(cont.),Closinginvolvesthefollowingsteps:RevenuesareclosedtotheIncomesummaryaccount.ExpensesareclosedtotheIncomesummaryaccount.ThebalanceintheIncomesummaryaccountisclosedtotheOwnersequityaccount.TheOwnersdividends/withdrawalsaccountisclosedtotheOwnersequityaccount.,AccountingEnglish2017,46,ClosingEntriesforRevenueAccounts,SinceSalesRevenuehasacreditbalance,theclosingentryrequiresadebittotheServiceRevenueaccount.,AccountingEnglish2017,47,ClosingEntriesforRevenueAccounts,AccountingEnglish2017,48,ClosingEntriesforExpenseAccounts,Sinceexpenseaccountshaveadebitbalance,theclosingentryrequiresacredittotheexpenseaccounts.,AccountingEnglish2017,49,NetIncome,ClosingEntriesforExpenseAccounts,.,AccountingEnglish2017,50,ClosingtheIncomeSummaryAccount,SinceIncomeSummaryhasa$2860creditbalance,theclosingentryrequiresadebittoIncomeSummary.,AccountingEnglish2017,51,ClosingtheIncomeSummaryAccount,ThebalanceinIncomeSummaryisnowzero.,AccountingEnglish2017,52,ClosingtheOwnersDividendAccount,Sincethedividendaccounthasadebitbalance,theclosingentryrequiresacredittodividend.,AccountingEnglish2017,53,ClosingtheOwnersDividendAccount,AccountingEnglish2017,54,Step9:Post-closingtrialbalance,Thetwomaingoalsofthepost-closingtrialbalanceareto:testtheequalityofdebitsandcreditsinthegeneralledgeraftertheclosingentrieshavebeenpostedconfirmthatalltemporaryaccountshavebeenclosed,AccountingEnglish2017,55,Afterallclosing