corporate financial accounting （哈尔滨商业大学）--f02

,Learning Objectives,1.Usefulness of an Account2.Characteristics of an Account3.Analyzing and Summarizing Transactions4.Illustration of Analyzing and Summarizing5.Trial Balance6.Discovery and Correction of Errors7.Financial Analysis and Interpretation,Power Notes,Analyzing Transactions,Chapter F2,C2,Double-Entry Accounting Analyzing and Recording Transactions Chart of Accounts, Trial Balance Journal, Ledger, and Trial Balance Recording and Posting an Entry Correcting Errors Horizontal Analysis,Slide #Power Note Topics,3113640435057,Power Notes,Analyzing Transactions,Chapter F2,Double-Entry Accounting,“ Double-entry accounting is based on a simple concept: each party in a business transaction will receive something and give something in return. In bookkeeping terms, what is received is a debit and what is given is a credit. The T account is a representation of a scale or balance.”,Luca PacioliDeveloper ofDouble-EntryAccounting,Scale or Balance,ReceiveDEBIT,GiveCREDIT,T account,Left SideReceiveDEBIT,Right SideGiveCREDIT,Expanded Accounting Equation,“ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.”,DEBITSreceived,CREDITSgiven,=,Expanded Accounting Equation,“ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.”,DEBITSreceived,CREDITSgiven,=,Assets,Expanded Accounting Equation,“ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.”,Assets,DEBITSreceived,CREDITSgiven,=,Expenses,Expanded Accounting Equation,“ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.”,Expenses,Assets,DEBITSreceived,CREDITSgiven,=,Liabilities,Expanded Accounting Equation,“ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.”,Expenses,Liabilities,Assets,DEBITSreceived,CREDITSgiven,=,Owners Equity,Expanded Accounting Equation,“ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.”,Expenses,Liabilities,Owners Equity,Assets,DEBITSreceived,CREDITSgiven,=,Revenues,Expanded Accounting Equation,“ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.”,Expenses,Liabilities,Owners Equity,Assets,DEBITSreceived,CREDITSgiven,=,Revenues,NetIncome,NetSolutions,“ On November 1, 2002, I started a business called NetSolutions. I plan to use my knowledge of microcomputers and offer computer consulting services for a fee. The following double-entry transactions show how amounts received (debits) always equal amounts given (credits).”,Chris Clark, Owner,Business Transactions,General Journal,giveCredit,NetSolutions(investee),Chris Clark (investor),giveCredit,Entry A.,DateDescriptionDebitCredit11/1,Chris Clark deposits $25,000 in a bank account for NetSolutions in exchange for capital stock.,Chris Clark deposits $25,000 in a bank account for NetSolutions in exchange for capital stock.,Business Transactions,General Journal,giveCredit,NetSolutions(investee),Cash,Chris Clark (investor),giveCredit,Entry A.,DateDescriptionDebitCredit11/1Cash 25,000,Business Transactions,General Journal,DateDescriptionDebitCredit11/1Cash 25,000 Capital Stock 25,000,giveCredit,NetSolutions(investee),Cash,CapitalStock,Chris Clark (investor),giveCredit,Entry A.,Chris Clark deposits $25,000 in a bank account for NetSolutions in exchange for capital stock.,NetSolutions buys land for $20,000.,Business Transactions,giveCredit,NetSolutions(buyer),Land Owner (seller),giveCredit,Entry B.,General Journal,DateDescriptionDebitCredit11/5,NetSolutions buys land for $20,000.,Business Transactions,giveCredit,NetSolutions(buyer),Land,Land Owner (seller),giveCredit,Entry B.,General Journal,DateDescriptionDebitCredit11/5Land 20,000,NetSolutions buys land for $20,000.,Business Transactions,giveCredit,NetSolutions(buyer),Land,Cash,Land Owner (seller),giveCredit,Entry B.,General Journal,DateDescriptionDebitCredit11/5Land 20,000 Cash 20,000,NetSolutions buys supplies for $1,350, agreeing to pay in the near future.,Business Transactions,giveCredit,NetSolutions(buyer),Supplier (seller),giveCredit,Entry C.,General Journal,DateDescriptionDebitCredit11/10,NetSolutions buys supplies for $1,350, agreeing to pay in the near future.,Business Transactions,giveCredit,NetSolutions(buyer),Supplies,Supplier (seller),giveCredit,Entry C.,General Journal,DateDescriptionDebitCredit11/10Supplies 1,350,NetSolutions buys supplies for $1,350, agreeing to pay in the near future.,Business Transactions,giveCredit,NetSolutions(buyer),Supplies,Supplier (seller),giveCredit,Entry C.,A promiseto pay later,General Journal,DateDescriptionDebitCredit11/10Supplies 1,350 Accounts Payable 1,350,NetSolutions earns fees of $7,500, receiving cash.,Business Transactions,giveCredit,NetSolutions(seller),Customer (buyer),giveCredit,Entry D.,General Journal,DateDescriptionDebitCredit11/18,NetSolutions earns fees of $7,500, receiving cash.,Business Transactions,giveCredit,NetSolutions(seller),Cash,Customer (buyer),giveCredit,Entry D.,General Journal,DateDescriptionDebitCredit11/18Cash 7,500,NetSolutions earns fees of $7,500, receiving cash.,Business Transactions,giveCredit,NetSolutions(seller),Cash,Customer (buyer),giveCredit,Entry D.,Services,General Journal,DateDescriptionDebitCredit11/18Cash 7,500 Fees Earned 7,500,DateDescriptionDebitCredit,NetSolutions paid: wages, $2,125; rent, $800; utilities, $450; and miscellaneous, $275.,Business Transactions,General Journal,giveCredit,NetSolutions(buyer),Various suppliers,giveCredit,Entry E.,DateDescriptionDebitCredit11/18 Wages Expense2,125Rent Expense800Utilities Expense450Misc. Expense275,NetSolutions paid: wages, $2,125; rent, $800; utilities, $450; and miscellaneous, $275.,Business Transactions,General Journal,giveCredit,NetSolutions(buyer),Services,benefits,Various suppliers,giveCredit,Entry E.,DateDescriptionDebitCredit11/18 Wages Expense2,125Rent Expense800Utilities Expense450Misc. Expense275 Cash 3,650,NetSolutions paid: wages, $2,125; rent, $800; utilities, $450; and miscellaneous, $275.,Business Transactions,General Journal,giveCredit,NetSolutions(buyer),Services,benefits,Various suppliers,giveCredit,Entry E.,Cash,NetSolutions pays $950 to creditors on account.,Business Transactions,giveCredit,NetSolutions(payor),Supplier (payee),giveCredit,Entry F.,General Journal,DateDescriptionDebitCredit11/30,NetSolutions pays $950 to creditors on account.,Business Transactions,giveCredit,NetSolutions(payor),Reduction in obligation,Supplier (payee),giveCredit,Entry F.,General Journal,DateDescriptionDebitCredit11/30Accounts Payable 950,NetSolutions pays $950 to creditors on account.,Business Transactions,giveCredit,NetSolutions(payor),Reduction in obligation,Supplier (payee),giveCredit,Entry F.,Cash,General Journal,DateDescriptionDebitCredit11/30Accounts Payable 950 Cash 950,At the end of the month, the cost of supplies on hand is $550.,Business Transactions,giveCredit,NetSolutions(user),Internal Transaction(no external entity),giveCredit,Entry G.,General Journal,DateDescriptionDebitCredit11/30,At the end of the month, the cost of supplies on hand is $550.,Business Transactions,giveCredit,NetSolutions(user),Use of supplies,Internal Transaction(no external entity),giveCredit,Entry G.,General Journal,DateDescriptionDebitCredit11/30Supplies Expense 800,At the end of the month, the cost of supplies on hand is $550.,Business Transactions,giveCredit,NetSolutions(user),Use of supplies,Internal Transaction(no external entity),giveCredit,Entry G.,Supplies,General Journal,DateDescriptionDebitCredit11/30Supplies Expense 800 Supplies 800,NetSolutions paid dividends of $2,000.,Business Transactions,giveCredit,NetSolutions(payor),Chris Clark (stockholder),giveCredit,Entry H.,General Journal,DateDescriptionDebitCredit11/30,Business Transactions,giveCredit,NetSolutions(payor),Reduction in equity,Chris Clark (stockholder),giveCredit,Entry H.,General Journal,DateDescriptionDebitCredit11/30Dividends 2,000,NetSolutions paid dividends of $2,000.,Business Transactions,giveCredit,NetSolutions(payor),Reduction in obligation,Chris Clark (stockholder),giveCredit,Entry H.,Cash,General Journal,DateDescriptionDebitCredit11/30Dividends 2,000 Cash 2,000,NetSolutions paid dividends of $2,000.,NetSolutionsChart of Accounts,Balance Sheet,Income Statement,1.Assets11Cash12Accounts Receivable14Supplies15Prepaid Insurance17Land18Office Equipment2.Liabilities21Accounts Payable23Unearned Rent3.Owners Equity31Capital Stock32Retained Earnings33Dividends,4.Revenue41Fees Earned5.Expenses51Wages Expense52Rent Expense54Utilities Expense55Supplies Expense59Miscellaneous Expense,NetSolutionsTrial BalanceNovember 30, 2002,11Cash5,90014Supplies55017Land20,00021Accounts Payable40031Capital Stock25,00033Dividends2,00041Fees Earned7,50051Wages Expense2,12552Rent Expense80054Utilities Expense45055Supplies Expense80059Miscellaneous Expense27532,90032,900,BalanceSheet,IncomeStatement,NetSolutionsTrial BalanceNovember 30, 2002,11Cash5,90014Supplies55017Land20,00021Accounts Payable40031Capital Stock25,00033Dividends2,00041Fees Earned7,50051Wages Expense2,12552Rent Expense80054Utilities Expense45055Supplies Expense80059Miscellaneous Expense27532,90032,900,1.Transactions are analyzed and recorded in journal.,Documents,Journal,Journal, Ledger, Trial Balance,1.Transactions are analyzed and recorded in journal.,Documents,Journal,2.Transactions are posted from journal to ledger.,Journal,Ledger,Journal, Ledger, Trial Balance,1.Transactions are analyzed and recorded in journal.,Documents,Journal,2.Transactions are posted from journal to ledger.,Journal,Ledger,3.Trial balance is prepared.,Journal, Ledger, Trial Balance,Post. DateDescriptionRef.DebitCredit12/1Prepaid Insurance 2,400 Cash 2,400,General Journal,Page 1,Recording and Posting an Entry,1. Analyze and record the transaction as shown.2. Post the debit side of the transaction.3. Post the credit side of the transaction.,Post. DateDescriptionRef.DebitCredit12/1Prepaid Insurance 2,400 Cash 2,400,Post. BalanceDateItemRef.DebitCredit DebitCredit12/1,Account: Prepaid Insurance Account No. 15,General Journal,General Ledger,Page 1,Recording and Posting an Entry,Enter the transaction date in the ledger account.,Post. DateDescriptionRef.DebitCredit12/1Prepaid Insurance 2,400 Cash 2,400,Post. BalanceDateItemRef.DebitCredit DebitCredit12/11 2,400,Account: Prepaid Insurance Account No. 15,General Journal,General Ledger,Page 1,Recording and Posting an Entry,Enter the debit amount in the ledger debit column.,Post. DateDescriptionRef.DebitCredit12/1Prepaid Insurance 2,400 Cash 2,400,Post. BalanceDateItemRef.DebitCredit DebitCredit12/11 2,4002,400,Account: Prepaid Insurance Account No. 15,General Journal,General Ledger,Page 1,Recording and Posting an Entry,Update the ledger account balance.,Post. DateDescriptionRef.DebitCredit12/1Prepaid Insurance 2,400 Cash 2,400,Post. BalanceDateItemRef.DebitCredit DebitCredit12/11,Account: Prepaid Insurance Account No. 15,General Journal,General Ledger,Page 1,Recording and Posting an Entry,4,Enter the journal page in the ledger account.,Post. DateDescriptionRef.DebitCredit12/1Prepaid Insurance152,400 Cash 2,400,Post. BalanceDateItemRef.DebitCredit DebitCredit12/112,4002,400,Account: Prepaid Insurance Account No. 15,General Journal,General Ledger,Page 1,Recording and Posting an Entry,Enter the ledger account number in the journal.,Recording and Posting an Entry,Post. DateDescriptionRef.DebitCredit12/1Prepaid Insurance152,400 Cash112,400,Post. BalanceDateItemRef.DebitCredit DebitCredit11/30Balance5,90012/112,4003,500,Account: Cash Account No. 11,General Journal,General Ledger,Page 1,All five parts of the credit posting are shown.,Correcting Errors,Three Types of Errors,Journal Entry,Ledger Posting,Correction Procedure,1.incorrectnot postedcorrect Journal,Correcting Errors,Three Types of Errors,Journal Entry,Ledger Posting,Correction Procedure,1.incorrectnot postedcorrect Journal2.correctincorrectly postedcorrect Ledger,Correcting Errors,Three Types of Errors,Journal Entry,Ledger Posting,Correction Procedure,Error 3 requires a correcting journal entry.,1.incorrectnot postedcorrect Journal2.correctincorrectly postedcorrect Ledger3.incorrectalready postedrecord and posta correcting entry,General Journal As recorded and posted,Correcting Errors An Example,On May 5 a purchase of office equipment on account was incorrectly journalized and posted as shown.,What part of this entry is incorrect? What correcting entry would you make?,DateDescriptionDebitCredit5/5Supplies 12,500 Accounts Payable 12,500,General Journal As recorded and posted,On May 5 a purchase of office equipment on account was incorrectly journalized and posted as shown.,General Journal A correcting entry,Correcting Errors An Example,DateDescriptionDebitCredit5/5Supplies 12,500 Accounts Payable 12,500,DateDescriptionDebitCredit5/5,General Journal As recorded and posted,On May 5 a purchase of office equipment on account was incorrectly journalized and posted as shown.,Correcting Errors An Example,General Journal A correcting entry,DateDescriptionDebitCredit5/5Supplies 12,500 Accounts Payable 12,500,DateDescriptionDebitCredit5/5Office Equipment 12,500,General Journal As recorded and posted,On May 5 a purchase of office equipment on account was incorrectly journalized and posted as shown.,Correcting Errors An Example,General Journal A correcting entry,DateDescriptionDebitCredit5/5Office Equipment 12,500 Supplies 12,500,DateDescriptionDebitCredit5/5Supplies 12,500 Accounts Payable 12,500,Objective: Use horizontal analysis to compare financial statements from different periods.,Financial Analysis and Interpretation,Comparative Balance SheetDecember 31, 2003 and 2002,AssetsCurrent assets$ 550,000$ 533,000Long-term investments95,000177,500Plant assets (net)444,500470,000Intangible assets50,00050,000 $1,139,500$1,230,500,Increase (Decrease)20032002AmountPercent,Objective: Use horizonta