会计英语Accounting Cycle教学课件

会计英语二.一AccountingEquationandDouble-entryAccountingTounderstandaccountinginformation,weneedtoknowhowanaccountingsystemcapturesrelevantdataabouttransactions,andthenclassifiesrecords,andreportsdata.Chapter二AccountingCycle

Theaccountingsystemreflectstwobasicaspectsofafirm:whatitownsandwhatitowes.Assetsareresourcesthatownedorcontrolledbyapanyandcouldbringbenefitstoitinthefuture,suchascash,supplies,equipment,andland.Theclaimsonapany’sassets(whatitowesofafirm)areseparatedintoliabilitiesandequity.Liabilitiesarewhatapanyowesitscreditorinfuturepayments,productsorservices.Equity(alsocalledowner’sequityorcapital)referstotheclaimsofitsowner(s).二.一.一AccountingEquation

Therelationofassets,liabilities,andequityisreflectedinthefollowingaccountingequation:Assets=Liabilities+EquityInthisequation,liabilitiesareusuallyshownbeforeequitybecausecreditors’claimsmustbepaidbeforetheclaimsofowners.Theaccountingequationappliestoalltransactionsandevents,toallformsofpaniesandorganizations,andtoallpointsoftime.Themechanicrequiringthateverytransactionshouldberecordedinthedebitsideandcreditsideofoneormoreaccountswiththeequalamount.Thedouble-entrysystemisbasedontheaccountingequation.二.一.二Double-entrySystem

Assets=Liabilities+Owner’sequityDebitforCreditforDebitforCreditforDebitforCreditforIncreasesDecreasesDecreasesIncreasesDecreasesIncreasesTheincreaseordecreaseofdifferenttypesofaccountswouldberecordedasfollows:Therecordingofaccountingtransactionsunderdouble-entrysystemmaybeformulatedinthefollowingfourrules(一)Theincreaseofassetshouldbedebitedtoassetaccountsandthedecreaseofassetshouldbecredited.(二)Theincreaseofliabilityandowners’equityitemsshouldbecreditedtoliabilityandowners’equityaccountsandthedecreaseshouldbedebited.(三)Asrevenueseventuallyincreaseowners’equity,theincreaseofrevenueshouldbecreditedtoarevenueaccount,andthedecreaseshouldbedebited.(四)Asexpenseseventuallydecreaseowners’equity,theincreaseofexpenseshouldbedebitedtoanexpenseaccount,andthedecreaseshouldbecredited.Theaccountingcycleistheaccountingprocedures(orsteps)inpreparingfinancialstatement.Thereasonforthenameofcycleisthattheproceduresarerepeatedduringeachreportingperiodbythesamesequence.Theaccountingcyclestartswithanalyzingtransactionsandendswithpreparingfinancialstatements.二.二AccountingCycle

Theaccountingcyclegenerallyconsistsofthefollowingprocedures.(一)Analyzingtransactionsandeventsastheyoccur.(二)Journalizingtransactionsinajournal.(三)Postingjournalentriestotheappropriateledger.(四)Preparinganunadjustedtrialbalance.(五)Preparingadjustingjournalentriesandpostingthemtotheledger.(六)Preparinganadjustedtrialbalance.(七)Preparingclosingjournalentriesandpostingtotheledger.(八)Preparingpost-closingtrailbalance.(九)Preparingfinancialstatements.(一零)Preparingreversingentriesinthenextperiodifnecessary.Tohaveabetterillustrationoftheproceduresinanaccountingcycle,weshowthesestepsintheExhibit二-一.Journalisachronologicalrecordofeachbusinesstransactioninorderofdate.Sometimesthejournalisalsocalledthebookoforiginalentry,becauseitistheaccountingrecordinwhichtransactionsarefirstrecorded.Journalscanbeclassifiedintogeneraljournalsandspecialjournals.Aspecialjournalisanaccountingjournaldesignedtorecordaspecifictypeoftransaction.Ageneraljournalisusedfortransactionsthatdonotfitoneofthespecialjournals.二.三JournalsThegeneraljournalhasadisadvantagedifferenttypesoftransactionswillberecordedinascatteredsituationwhichisdetrimentalforpaniestoreflectandcontrolimportantandregulartransactions.paniesneedtousespecialjournalsThemonspecialjournalincludessalesjournalcashjournalpurchasesjournalThecollectionofallaccountsandtheirbalancesinaninformationsystemiscalledaledger.Aledgerisalsocalledbooksoffinalentry.Itrecordsclassifiedandsummarizedfinancialinformationfromjournalsandshowstheircurrentbalances.Theledgeraccountisaseparatepageinaledgerthatrecordsincreasesanddecreasesineachbalancesheetitem,classifiedunderassets,liabilities,orowners’equity.Theledgeraccountcanbeclassifiedintogeneralledgeraccountandsubsidiaryledgeraccount.二.四Ledgers

Thegeneralledgeraccountisanaccountorrecordusedtosortandstorebalancesheetandinestatementtransactions.ExamplesofgeneralledgerincludetheassetaccountssuchasCash,AccountsReceivable,Inventory,Investments,LandandEquipment.ExamplesofthegeneralledgerliabilityaccountsincludeAccountsPayable,NotesPayable,andAccruedExpensesPayable.ExamplesofinestatementaccountsincludeSalesRevenue,ServiceRevenues,SalariesExpense,RentExpense,AdvertisingExpense,InterestExpense,andLossonDisposalofAssets.二.四.一GeneralLedgerAccountThesubsidiaryledgeraccountisalsocalledsupportingledgeraccount,whichcontainsthedetailedinformationtosupportageneralledgeraccount.二.四.二SubsidiaryLedgerAccountToensurethattheledgerisup-to-date,entriesshouldbepostedfromjournaltoledgerassoonaspossible.Thismightbedonedaily,weekly,orwheneverisrequired.Allentriesmustbepostedtotheledgerbeforefinancialstatementsarepreparedtoensurethattheaccountbalancescouldbetransferredintothecorrespondingledgeraccountstimelyandcorrectly.二.四.三PostingJournalEntriestotheLedgerAccordingtotheaccrual-basisaccountingprincipleandthematchingprinciple,allrevenuesearedandexpensesincurredduringthesameperiodmustbereportedregardlesswhethertherelatedcashtorevenuesorexpensesisreceivedorpaid.Therefore,itisnecessarytopreparetheadjustingjournalentriesattheendofanaccountingperiod.Therearefourtypesofadjustingjournalentries,includingprepaidexpenses,unearnedrevenues,accruedexpenses,andaccruedrevenues.二.五Adjusting

Prepaidexpensesarepaymentsofexpensesinadvance,whichrefertoitemspaidforinadvanceinordertoreceivetheirbenefits.Prepaidexpensesareassets.Whentheseassetsareused,theircostswillbeeexpenses.二.五.一PrepaidExpenses

Withthepassageoftime,thebenefitsoftherentgraduallyexpire,andaportionofthePrepaidRentassetbeesexpense.OnJan.三一,二零×七,thePrepaidRentaccountshouldbedecreasedbytheportionthathasbeenusedup.Theusedupportionis$二

零零零(二四

零零零/一二×一),sotheadjustingjournalentryshouldtransfer$二,零零零ofPrepaidExpensetoRentExpense.Thespecificadjustingentryis:RentExpense 二

零零零

PrepaidRent 二

零零零Depreciationistheprocessofallocatingthecostsoffixedassetsovertheirexpectedusefullives.Theadjustingjournalentryofdepreciationissimilartothatforprepaidexpenses.Themaindifferenceofthemisthelengthoftime.Prepaidexpensesusuallyexpirewithinoneyear,whilemostofthefixedassetskeepbeingusefulforseveralyears.SupposethatNCo.purchasedamachinefor$一五

零零零onNov.一二零×七.Machine 一五

零零零

Cash 一五

零零零Themachineisexpectedtohaveausefullifeoffiveyearsandhavenoresidualvalueattheendofthisperiod.Thedepreciationmethodofthispanyisstraight-linemethodwhichmeansthemonthlydepreciationwillbe$二五零(一五

零零零÷(五×一二)).Thenthedepreciationofthefirstdepreciablemonthis$二五零($一五

零零零÷六零)anditwillberecordedbythisentry:DepreciationExpense 二五零

AccumulatedDepreciation 二五零Accruedexpensesareexpensesthathaveoccurredinaperiodbuthavenotbeenpaid.Accruedexpensemustbereportedintheinestatementoftheperiodwhenincurred.monexamplesofaccruedexpensesareaccruedsalary,accruedinterest,accruedrent,andaccruedtaxes.二.五.二AccruedExpenses

SupposethatNCo.have二零employeesandpays$一零零perdayperemployeeor$五零零forafive-dayworkweekbeginningfromMondayandendingonFriday.ItsemployeesarepaideverytwoweeksonFriday.ThesalariesofJanuary,二零×七ispaidonthe一二th,二六thofJanuaryandthe九thofFebruary.AttheendofJanuary,theemployeehasearnedthreeworkdays’(Jan.二九,三零,三一)salaryof$六

零零零($一零零×三×二零),yetthissalarycosthasnotbeenpaidorrecorded.

Tomakethefinancialstatementplete,NCo.shouldmakethefollowingadjustingentrytoaccountforaccruedsalary.SalaryExpense 六

零零零

AccruedSalary 六

零零零AccruedrevenuesRevenuesbeforereceivingcashorotherassetsIncludingservicerevenueprovidedbutnotbilledtoclientsattheendofaperiod,rentrevenueonpropertyrentedtoothersbutnotreceivedincash,andsoon.ExampleAssumethatNCo.agreedtoprovideservicestoaclientforafeeof$六

零零零fromJanuary一七toFebruary一五(三零days).Inthecontract,theagreementisthatcashwillbepaidwhentheservicehasbeenpletelyprovided.OnJanuary三一,二零×七,NCo.hasprovided一五daysservice.Sincethecontractedserviceshavenotyetbeenentirelyprovided,NCo.hasneitherbilledtheclientnorrecordedtheservicesalreadyprovided.However,asthe一五-dayservicerevenuehasearned,NCo.mustrecordthispartoftheexpectedbillingasrevenueinthatperiod,eventhoughthereisnobillingorcollection.So,onJan.三一,NCo.mustreport$三

零零零($六

零零零×一五÷三零)intheinestatement.ThebalancesheetmustreflectthattheclientowesNCo.$三,零零零byaccountsreceivable.AccountsReceivable 三

零零零

ServiceRevenue 三

零零零二.五.三AccruedRevenuesUnearnedRevenuesThecashorotherassetsreceivedbeforeearningtherevenuecreatesunearnedrevenue,whichisaliabilityandmeansthepanyowesproductsorservicestocustomers.Onlywhenproductsorservicesareprovided,canthebusinessearnandrecognizetherevenue.ExampleSupposethatNCo.received$三零零onDec.一七unearnedrentrevenueforonemonth(Dec.一七二零×七—Jan.一五二零×八).Theentrytorecordthecashreceivedinadvanceis:Cash 三零零

UnearnedRentRevenue 三零零二.五.四UnearnedRevenuesOnDec.三一,二零×七,ahalfofamonth’sRentRevenuehasbeenearned.Accordingly,$一五零oftheUnearnedRentRevenue($三零零×一五÷三零)mustbereportedasearnedrevenueintheIneStatementandtheleft$一五零($三零零-$一五零)shouldbereportedintheBalanceSheetasaliability.Theadjustingjournalentryisasfollows.UnearnedRentRevenue 一五零

RentRevenue 一五零Animportantstepattheendofanaccountingperiod,whichgetstheaccountsreadyforthenextperiod.Intheclosingprocess,wemustidentifyaccountsforclosing,recordandposttheclosingentries,andprepareapost-closingtrialbalanceTwomajorpurposesFirst,byresettingrevenues,expenseofcurrentperiod,theinecouldbemeasuredproperlybytheseaccountsinthenextperiod.Second,ithelpstosummarizeaperiod’srevenuesandexpenses.二.六ClosingProcessAtemporaryaccountisageneralledgeraccountthatbeginswithazerobalanceineachaccountingperiod.closingtheaccountAttheendofeachaccountingperiod,thebalancesoftemporaryaccountswillbetransferredtoanotheraccount.Theclosingprocessappliesonlytotemporaryaccounts.Generally,inestatementaccountsaretemporaryaccounts.Apermanentaccountageneralledgeraccountthatdoesnotneedtobeclosedattheendofaccountingperiod.Inotherwords,itcarriesitsendingbalanceintothenextperiod.Generally,balancesheetaccountsarepermanentaccounts.二.六.一TemporaryandPermanentAccountsPostingclosingentriesTotransferringtheendingbalanceofrevenue,expense,andwithdrawaccountstopermanentaccountsItisnecessarytopostclosingentriesattheendofeachperiod.Thereasonsareasfollows.(一)Revenue,expense,andwithdrawaccountsaretemporaryaccounts,andtheyneedtobewithzerobalancesatthebeginningofeachperiod.(二)Owner’sequitymustreflectrevenuesandexpensesformedinpriorperiods.Whencloserevenue,expense,andwithdrawaccountsFirstly,transfertheirbalancestoinesummaryaccount.Secondly,transferwithdrawalaccountbalanceequityaccount.Whentheseclosingentrieshavebeenposted,allofrevenues,expenses,withdrawals,andinesummaryaccounthaveazerobalance.二.六.二PostingClosingEntriesThedoubleentryaccountingrequiresthesumofdebitaccountbalancesequaltothesumofcreditaccountbalances.Atrialbalanceisalistofaccountsandtheirbalancesatapointoftime,anditcouldbeusedtoconfirmthis.二.七TrialBalance

(一)Listeachaccount’stitleanditsbalancefromtheledgerintoatrialbalance.Ifanaccounthasazerobalance,itcouldbeomitted.(二)Sumupallthedebitbalancesandcreditbalancesintrialbalance.(三)Checkwhetherthetotaldebitbalancesequalthetotalcreditbalances.二.七.一StepsinPreparingaTrialBalance

Ifthetrialbalancedoesnotbalance,theerrormustbefoundoutandcorrected.Howcouldyousearchforandcorrecterrors?Theefficientwayistocheckthejournalizing,posting,andthetrialbalancepreparationinreverseorder.Detailedwaystosearchforerrors.(一)Verifywhetherthetrialbalancecolumnshavebeencorrectlyadded.(二)

Verifywhethertheaccountbalancesareaccuratelyenteredfromtheledger.(三)Checkwhetheradebt(orcredit)balanceismistakenlylistedinthetrialbalanceasacredit(ordebit).(四)Reputethebalanceofeachaccountintheledger.(五)Verifywhethereachjourna