session 3.ppt introduction to financial accounting
Accounting cycle in service company/ Cambodian Mekong University/Chhan Rathana
1. MEKONG SCHOOL OF ACCOUNTING
Accounting Cycle in Service Company
Mr. PIN SOPNHATH ID: 4231130004
Mss. SAING SOREYAN ID: 4231130018
Mr. MEAN CHET ID: 4231130331
Mss. UK MARILEY ID: 4231130025
Mr. CHHAN RATHANA ID: 4231130040
Mss. THAN SREYPOV ID: 4231130021
Prepared by group: 9
8/1/2014 1
4. I. introduction
The definition of accounting
Accounting is the to identify,
record, and communicate the
e c o n o m i c e v e n t s o f a n
organization to interested users.
Accounting is one of the key
functions for almost any
business; it may be handled by a
bookkeeper and accountant at
small firms or by sizable finance
departments with dozens of
employees at larger companies
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5. I. introduction
The important of accounting
Can assist in preparing list of the company to have the
order.
Shows the financial situation of company to manage
its easy preparation and strategically decision.
Shows the revenue and expense that have in
organization for help manager can reduction other
bad expense.
Shows the results of business, Net income or Net
loss?
Help employer to check activities of organization
Reduce exploitations.8/1/2014 5
6. II. Literatureview
The Five Type of Account
The Chart of Accounts
Nine Steps of accounting in Service Company
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7. II. Literatureview
The Five Type of Account
1) Asset
2) Liabilities
3) Owner’s Equity
4) Revenue
5) Expense
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8. II. Literature review
The Five Type of Account
• 1. Asset is resources or something valuable
belonging to firms or organization which can be
used for the payment of debts, the asset account
represents the value of the assets owned by the
business and there are current asset and fixed
asset. currents asset there are such as, cash,
account receivable, inventories, office supply, note
receivable, etc. Fixed assets there are, land,
equipment, accumulated depreciation equipment,
truck, patents, building, accumulated depreciation
building, etc.
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9. II. Literature review
The Five Type of Account
2. Liabilities is type of debt or upcoming cost for
the business that company necessary to pay in
cash in the one periodic, there are two current
liabilities and long-term liabilities. Current
liabilities that need to pay during one year it
included account payable, note payable, interest
payable, salary payable, unearned Revenue. And
long-term liabilities, there are mortgage payable,
and bond payable.
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10. II. Literature review
The Five Type of Account
3. Owner’s equity is the net worth and ownership
of the business, it included capital or owner
investments, drawing, retained earnings, and
common .
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11. II. Literature review
The Five Type of Account
4. Revenue is the income in cash or on account
that company or organization received from
customer’s paying, when the company have
serviced to consumers. Revenues include service
revenue, interest revenue, rent revenue,
admission revenue, concession revenue, etc.
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12. II. Literature review
The Five Type of Account
5. Expense is an arrangement in which employer
will pay for the operations in company, it included
salary expense, rent expense, utilities expense,
insurance expense, depreciation expense, interest
expense, advertising expense, supply expense,
etc.
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13. II. Literature review
Asset
101 Cash
112 Account Receivable
126 Supplies
128 Cleaning Supply
130 Prepaid Insurance
136 Prepaid Rentals
157 Office Equipment
158 Accumulated
Depreciation-Office
Equipment
The Chart of Accounts
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14. II. Literature review
The Chart of Accounts
Asset
140 Land
143 Cottages
144 Accumulated Depreciation-
Cottage
145 Building
149 Furniture
150 Accumulated Depreciation-
Furniture
153 Store Equipment
154 Accumulated Depreciation-
Equipment
157 Equipment
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15. II. Literature review
The Chart of Accounts
Liabilities Account
200 Note Payable
201 Account Payable
209 Unearned Revenue
212 Salaries Payable
230 Interest Payable
244 Utilities Payable
275 Mortgage Payable
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17. II. Literature review
The Chart of Accounts
Revenue
400 Service Revenue
405 Admission Revenue
406 Concession Revenue
429 Rent Revenue
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18. II. Literature review
The Chart of Accounts
Expense Account
610 Advertising Expense
620 Depreciation Expense-Cottage
621 Depreciation Expense-
Furniture
622 Repair Expense
632 Film Rental Expense
631 Supplies Expense
711 Depreciation Expense
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19. II. Literature review
The Chart of Accounts
718 Interest Expense
722 Insurance Expense
726 Salaries Expense
729 Rent Expense
732 Utilities Expense
Expense Account
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20. Nine Steps of accounting in Service Company
II. Literature review
1. Analyze
business
transactions
2. Journalize the
transactions
3. Post to ledger
accounts
4. Prepare a trial
balance
5. Journalize and
post adjusting
entries
6. Prepare an
adjusted trial
balance
7. Prepare
financial
statements
8. Journalize and
post-closing
entries
9. Prepare a
post-closing trial
balance
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22. A journal is a book-paper or electronic-in which
transaction are recorded.
On January 01, 2014 the Tourism Cambodia Company (TCC) starts open
operation businesses that. Prepare the journalize in January :
01 invested $100,000 on cash in the business.
02 Paid $3,000 cash for April office rent.
Jan. 01 Cash………………………………$100,000
TCC, Capital…………………………..$100,000
Jan. 02 Rent Expense………………..$3,000
Cash………………………………………..$3,000
2. Journalize the transactions
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23. Cash No101
Date Explanation Ref. Debit Credit Balance
2014
Jan. 01 Balance $100,000 $100,000
02 Balance $3,000 $97,000
TCC, Capital No301
Date Explanation Ref. Debit Credit Balance
2014
Jan. 01 Balance $10,000 $10,000
Rent Expense No729
Date Explanation Ref. Debit Credit Balance
2014
Jan.02 Balance $3,000 $3,000
3. Post to ledger accounts
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24. 4. Prepared Trail Balance
Tourism Cambodia COMPANY
Trial Balance
May 30, 2012
Cash $163,900
Account Receivable $35,500
Rent Expense $3,000
Supplies and VAT $8,000
Prepaid Insurance $5,000
Equipment and VAT $2,200
Note Payable $40,000
Account Payable $8,000
TCC, Capital $100,000
TCC, Drawing $5,000
Service Revenue $92,500
Unearned Revenue $15,000
Advertising Expense $7,000
Utilities Expense $900
Salaries Expense and TOS $25,000
$255,500 $255,500
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25. 5. Post the Adjusting entries
The end the January 2014 insurance expire $1,500;
Cash No101
Date Explanation Ref. Debit Credit Balance
2014
Jan. 31 Adjusted $1,500 $1,500
Insurance Expense No722
Date Explanation Ref. Debit Credit Balance
2014
Jan. 31 Adjusted $1,500 $1,500
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26. Preparing an adjusted trial balance, an adjusted
trial balance may be prepared after adjusting
entries are made and before the financial
statements are prepared. This is to test if the
debits are equal to credits after adjusting entries
are made.
6. Prepared an adjusted trail balance
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27. Income statement
7. Prepared financial statement
Tourism Cambodia COMPANY
Income Statement
May 31, 2012
Revenue
Service Revenue $92,500
Total Revenue $92,500
Expense
Rent Expense $3,000
Advertising Expense $7,000
VAT of equipment $200
VAT of supplies $727
TOS $1,953
Utilities Expense $900
Salaries Expense $23,047
Insurance Expense $1,500
Depreciation Expense $600
Supplies Expense $2,773
Interest Expense $600
Total Expense $42,300
Net Income $50,200
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28. Owner’s Equity Statement
7. Prepared financial statement
Tourism Cambodia COMPANY
Owner’s equity Statement
May 31, 2012
Beginning Capital $10,000
Plus: Net Income $50,200
Less: TCC, Drawing $5,000
Ending Capital $145,200
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29. Balance sheet
7. Prepared financial statement
Tourism Cambodia COMPANY
Balance Sheet
May 31, 2012
Asset:
Current Asset;
Cash $163,300
Account receivable $35,500
Supplies $4,500
Prepaid Insurance $3,500
Less: Accumulated depreciation $600
Total Current Asset $206,200
Property Plan and Equipment
Equipment $2,000
Total Property Plan and Equipment $2,000
Total Asset: $208,200
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30. Balance sheet
7. Prepared financial statement
Tourism Cambodia COMPANY
Balance Sheet
May 31, 2012
Liabilities and Owner’s Equity
Liabilities:
Current Liabilities;
Account Payable $8,000
Unearned Revenue $15,000
Total Current Liabilities $23,000
Long-term Liabilities:
Not Payable $40,000
Total Long-term Liabilities $40,000
Total Liabilities $63,000
Owner’s Equity
Ending Equity $145,200
Total Liabilities and Owner’s Equity $208,200
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31. 8. Post-closing entries
Tourism Cambodia COMPANY
Closing entry
May 31, 2012
Revenue ……………………………………….. $92,500
Income Summary……………. $92,500
(To close revenue account)
Income Summary……………………………….. $54,100
Rent Expense………………………. $3,000
Salaries Expense...................... $23,047
TOS…………………………………...... $1,953
Utilities Expense………………….. $900
Advertising Expense………….... $7,000
Insurance Expense……………..... $1,500
Depreciation Expense………….. $600
Supplies Expense……………….. $2,773
VAT of Supplies…………………… $727
VAT of equipment……………….. $200
Interest Expense…………………. $600
(To close expense account)8/1/2014 31
32. 8. Post-closing entries
Tourism Cambodia COMPANY
Closing entry
May 31, 2012
Income Summary……………………….. $50,200
Owner’s Capital…………… $50,200
(To close net income to owner’s capital)
Owner’s Capital……………………………… $5,000
Owner’s Drawing…………….. $5,000
(To close drawing to owner’s capital)
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34. The brief explanation, accounting is the to identify,
record, and communicate the economic events of an
organization to interested users and it is very important
for all organizations to use for classify, management
financial, check export and import of company, know
about of net loss or net income, etc.
Accounting cycle have nine steps that need for
service company, there are Analyze business transactions,
Journalize the transactions, Post to ledger accounts,
Prepare a trial balance, Journalize and post adjusting
entries, Prepare an adjusted trial balance, Prepare
financial statements, Journalize and post-closing entries,
Prepare a post-closing trial balance.
II. conclusion
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35. Reference
Internets:
What is accounting. Retrieved, march 24 2014, from google.com website:
http://www.accountingcoach.com/blog/what-is-accounting
and http:// www.asiabs.com/english/english_theme_accounting.htm
Definition of accounting. Retrieved, March, 24, 2014 from google.com
website: http://www.investopedia.com/terms/a/accounting.asp
What is important of accounting? Retrieved, March, 27, 2014 from
google.com website: http://www.ask.com/question/why-is-accounting-
important-to-bus...
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36. Type of account and different. Retrieved, March, 28, 2014 from google.com
website:
http://www.kashoo.com/accounting.../what-are-the-different-account-
what are nine steps of accounting ? Retrieved. March, 27, 2014 from
google.com website:
http://Mwiki.answers.com/Q/What_are_the_9_steps_of_accounting_cycle
Nine steps of accounting cycle. Retrieved, May, 09, 2014 from google.com
website:
http://www.accountingverse.com/accounting-basics/accounting-cycle.html
VAT and TOS. Retrieved, May, 09, 2014 from google.com website
http://www.tax.gov.kh/en/taxtypes.php
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Reference
37. Books:
Bun Sundro : fundamental of accounting, Angkor
Wat (1st Edition) 2008
Jerry J. Weygandt, Donald E.Keiso, Paul D. Kimmel.
(2009). Accounting Principle (9st ed.). USA: John
Wiley and Sons, Inc
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Reference