Accounting principle chapter 4.pptx
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Presents a snapshot at a point in time. To improve understanding, companies group similar assets and similar liabilities together.
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Accounting Cycle.pptx
The accounting cycle is a series of nine steps that are regularly repeated to record a company's financial transactions. The steps include collecting source documents, analyzing transactions, recording transactions in a journal, posting to the general ledger, preparing a trial balance, preparing a worksheet, creating financial statements, journalizing and posting closing entries, and preparing a post-closing trial balance. The accounting cycle ensures all financial records are complete and accurate.
How are financial statements prepared.pdf
Preparing financial statements involves the process of combining accounting information into a standardised financial set. Completed financial statements are provided to management, creditors, creditors, and investors, who use them to assess the performance, liquidity, and cash flow of the organisation.
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The accounting cycle consists of 9 key steps: (1) analyzing transactions, (2) journalizing transactions, (3) posting to ledger accounts, (4) preparing a trial balance, (5) journalizing and posting adjusting entries, (6) preparing an adjusted trial balance, (7) preparing financial statements, (8) journalizing and posting closing entries, and (9) preparing a post-closing trial balance. The purpose of the accounting cycle is to ensure all financial activities of a business are recorded and reported accurately through a series of processes that track money coming in and going out. Errors can occur if transactions are incorrectly recorded or posted, leading to an unbalanced trial balance that requires adjustment.
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Accounting cycle
The document discusses the accounting cycle, which is a series of steps that involve recording business transactions from source documents through journal entries, posting to ledgers, preparing a trial balance, and ultimately producing financial statements. It describes each step in detail, including source documents, journal entries, posting to ledgers, trial balances, and financial statements such as the income statement and balance sheet. The accounting cycle is an important process for small businesses to understand their financial status and performance over a period of time.
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Brief Exercise 4-5The ledger of Rios Company contains the follow.docx
Brief Exercise 4-5
The ledger of Rios Company contains the following balances: Owner’s Capital $28,375; Owner’s Drawings $1,917; Service Revenue $50,657; Salaries and Wages Expense $27,423; and Supplies Expense $6,708.
The closing entries are as follows:
(1)
Close revenue accounts.
(2)
Close expense accounts.
(3)
Close net income/(loss).
(4)
Close drawings.
Post the closing entries in the order presented in the problem and use the numbers as a reference.
Salaries and Wages Expense
Supplies Expense
Service Revenue
Owner’s Drawings
Income Summary
Owner’s Capital
Warning
Don't show me this message again for the assignment
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Cancel
Link to Text
Question Attempts: 0 of 3 used
Brief Exercise 4-7
The following selected accounts appear in the adjusted trial balance columns of the worksheet for Goulet Company.
Identify the accounts that would be included in a post-closing trial balance.
Accumulated Depreciation
Depreciation Expense
Owner’s Capital
Owner’s Drawings
Service Revenue
Supplies
Accounts Payable
Yes or no questions
Brief Exercise 4-8
The steps in the accounting cycle are listed in random order below.
List the steps in proper sequence, assuming no worksheet is prepared, by placing numbers 1–9.
(a)
Prepare a trial balance.
(b)
Journalize the transactions.
(c)
Journalize and post closing entries.
(d)
Prepare financial statements.
(e)
Journalize and post adjusting entries.
(f)
Post to ledger accounts.
(g)
Prepare a post-closing trial balance.
(h)
Prepare an adjusted trial balance.
(i)
Analyze business transactions.
Write 1-9 numbers
Brief Exercise 4-10
The balance sheet debit column of the worksheet for Hamidi Company includes the following accounts: Accounts Receivable $13,059; Prepaid Insurance $3,847; Cash $4,935; Supplies $4,377, and Debt Investments (short-term) $6,050.
Prepare the current assets section of the balance sheet, listing the accounts in proper sequence. (List current assets in order of liquidity.)
HAMIDI COMPANY
Partial Balance Sheet
$
$
Warning
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Show List of Accounts
Link to Text
For drop down boxes use list of accounts from this list:
Current Assets Stockholders Equity Total Liabilities and stockholders equit.
Current Liabilities Total Assets Total Long term Investments
Intangible Assets Total Current Assets Total Long term liabilities
Long term Investments Total Current Liabilities Total property, plant, and equipment
Long term Liabilities Total Intangible Assets Total stockgholders equity
Property, plant, and equipment Total Liabilities
Exercise 4-1
The trial balance columns of the worksheet for Nanduri Company at June 30, 2014, are as follows.
NANDURI COMPANY
Worksheet
For the Month Ended June 30, 2014
Trial Balance
Account Titles
Dr.
Cr.
Cash
2,324
Accounts Receivable
2,317
Supplies
...
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Accounting Cycle.pptx
The accounting cycle is a series of nine steps that are regularly repeated to record a company's financial transactions. The steps include collecting source documents, analyzing transactions, recording transactions in a journal, posting to the general ledger, preparing a trial balance, preparing a worksheet, creating financial statements, journalizing and posting closing entries, and preparing a post-closing trial balance. The accounting cycle ensures all financial records are complete and accurate.
How are financial statements prepared.pdf
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The accounting cycle consists of 9 key steps: (1) analyzing transactions, (2) journalizing transactions, (3) posting to ledger accounts, (4) preparing a trial balance, (5) journalizing and posting adjusting entries, (6) preparing an adjusted trial balance, (7) preparing financial statements, (8) journalizing and posting closing entries, and (9) preparing a post-closing trial balance. The purpose of the accounting cycle is to ensure all financial activities of a business are recorded and reported accurately through a series of processes that track money coming in and going out. Errors can occur if transactions are incorrectly recorded or posted, leading to an unbalanced trial balance that requires adjustment.
Ch04
This document discusses key accounting concepts related to accrual accounting including the revenue recognition principle, matching principle, and differences between cash basis and accrual basis accounting. It explains why adjusting entries are needed to follow these concepts and identifies major types of adjusting entries such as those for deferrals and accruals. Specific topics covered include preparing adjusting entries for prepaid expenses, unearned revenues, accrued revenues, and accrued expenses.
Accounting cycle
The document discusses the accounting cycle, which is a series of steps that involve recording business transactions from source documents through journal entries, posting to ledgers, preparing a trial balance, and ultimately producing financial statements. It describes each step in detail, including source documents, journal entries, posting to ledgers, trial balances, and financial statements such as the income statement and balance sheet. The accounting cycle is an important process for small businesses to understand their financial status and performance over a period of time.
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Brief Exercise 4-5The ledger of Rios Company contains the follow.docx
Brief Exercise 4-5
The ledger of Rios Company contains the following balances: Owner’s Capital $28,375; Owner’s Drawings $1,917; Service Revenue $50,657; Salaries and Wages Expense $27,423; and Supplies Expense $6,708.
The closing entries are as follows:
(1)
Close revenue accounts.
(2)
Close expense accounts.
(3)
Close net income/(loss).
(4)
Close drawings.
Post the closing entries in the order presented in the problem and use the numbers as a reference.
Salaries and Wages Expense
Supplies Expense
Service Revenue
Owner’s Drawings
Income Summary
Owner’s Capital
Warning
Don't show me this message again for the assignment
Ok
Cancel
Link to Text
Question Attempts: 0 of 3 used
Brief Exercise 4-7
The following selected accounts appear in the adjusted trial balance columns of the worksheet for Goulet Company.
Identify the accounts that would be included in a post-closing trial balance.
Accumulated Depreciation
Depreciation Expense
Owner’s Capital
Owner’s Drawings
Service Revenue
Supplies
Accounts Payable
Yes or no questions
Brief Exercise 4-8
The steps in the accounting cycle are listed in random order below.
List the steps in proper sequence, assuming no worksheet is prepared, by placing numbers 1–9.
(a)
Prepare a trial balance.
(b)
Journalize the transactions.
(c)
Journalize and post closing entries.
(d)
Prepare financial statements.
(e)
Journalize and post adjusting entries.
(f)
Post to ledger accounts.
(g)
Prepare a post-closing trial balance.
(h)
Prepare an adjusted trial balance.
(i)
Analyze business transactions.
Write 1-9 numbers
Brief Exercise 4-10
The balance sheet debit column of the worksheet for Hamidi Company includes the following accounts: Accounts Receivable $13,059; Prepaid Insurance $3,847; Cash $4,935; Supplies $4,377, and Debt Investments (short-term) $6,050.
Prepare the current assets section of the balance sheet, listing the accounts in proper sequence. (List current assets in order of liquidity.)
HAMIDI COMPANY
Partial Balance Sheet
$
$
Warning
Don't show me this message again for the assignment
Ok
Cancel
Show List of Accounts
Link to Text
For drop down boxes use list of accounts from this list:
Current Assets Stockholders Equity Total Liabilities and stockholders equit.
Current Liabilities Total Assets Total Long term Investments
Intangible Assets Total Current Assets Total Long term liabilities
Long term Investments Total Current Liabilities Total property, plant, and equipment
Long term Liabilities Total Intangible Assets Total stockgholders equity
Property, plant, and equipment Total Liabilities
Exercise 4-1
The trial balance columns of the worksheet for Nanduri Company at June 30, 2014, are as follows.
NANDURI COMPANY
Worksheet
For the Month Ended June 30, 2014
Trial Balance
Account Titles
Dr.
Cr.
Cash
2,324
Accounts Receivable
2,317
Supplies
...
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4-‹#›Accrual Accounting ConceptsKimmel ● Weygandt .docx
4-‹#›
Accrual Accounting Concepts
Kimmel ● Weygandt ● Kieso
Financial Accounting, Eighth Edition
4
4-‹#›
Prepare adjusting entries for deferrals.
CHAPTER OUTLINE
Explain the accrual basis of accounting and the reasons for adjusting entries.
1
2
LEARNING OBJECTIVES
Prepare adjusting entries for accruals.
3
Prepare an adjusted trial balance and closing entries.
4
4-‹#›
LEARNING OBJECTIVE
Explain the accrual basis of accounting and the reasons for adjusting entries.
1
LO 1
Generally a month, a quarter, or a year.
Fiscal year vs. calendar year.
Accountants divide the economic life of a business into artificial time periods (Periodicity Assumption).
Jan.
Feb.
Mar.
Apr.
Dec.
. . . . .
▼ HELPFUL HINT
An accounting time period that is one year long is called a fiscal year.
4-‹#›
Periodicity Assumption
Review Question
What is the periodicity assumption?
Companies should recognize revenue in the accounting period in which it is earned.
Companies should match expenses with revenues.
The economic life of a business can be divided into artificial time periods.
The fiscal year should correspond with the calendar year.
LO 1
4-‹#›
Companies recognize revenue in the accounting period in which the performance obligation is satisfied.
REVENUE RECOGNITION PRINCIPLE
LO 1
4-‹#›
TEACHING TIP
Service businesses recognize revenue when the services are performed, although many customers may have been billed for the services (on account). The cash has not been received; however, the services have been performed. Therefore, revenue should be recognized.
Illustration: Assume Conrad Dry Cleaners cleans clothing on June 30, but customers do not claim and pay for their clothes until the first week of July. The journal entries for June and July would be:
REVENUE RECOGNITION PRINCIPLE
LO 1
4-‹#›
“Let the expenses follow the revenues.”
ILLUSTRATION 4-1
EXPENSE RECOGNITION PRINCIPLE
LO 1
4-‹#›
ILLUSTRATION 4-1
GAAP relationships in revenue and expense recognition
EXPENSE RECOGNITION PRINCIPLE
LO 1
4-‹#›
INVESTOR INSIGHT
Reporting Revenue Accurately
The Until recently, electronics manufacturer Apple was required to spread the revenues from iPhone sales over the two-year period following the sale of the phone. Accounting standards required this because Apple was obligated to provide software updates after the phone was sold. Since Apple had service obligations after the initial date of sale, it was forced to spread the revenue over a two-year period. As a result, the rapid growth of iPhone sales was not fully reflected in the revenue amounts reported in Apple’s income statement. A new accounting standard now enables Apple to report much more of its iPhone revenue at the point of sale. It was estimated that under the new rule revenues would have been about 17% higher and earnings per share almost 50% higher.
Apple Inc.
LO 1
4-‹#›
Accrual-Basis Accounting
Transactions recorded in the periods in which the events .
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Completing the accounting cycle - Chapter four Accounting principles
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Accrual Accounting Concepts
Kimmel ● Weygandt ● Kieso
Accounting, Sixth Edition
4
4-‹#›
Prepare adjusting entries for deferrals.
CHAPTER OUTLINE
Explain the accrual basis of accounting and the reasons for adjusting entries.
1
2
LEARNING OBJECTIVES
Prepare adjusting entries for accruals.
3
Prepare an adjusted trial balance and closing entries.
4
4-‹#›
LEARNING OBJECTIVE
Explain the accrual basis of accounting and the reasons for adjusting entries.
1
LO 1
Generally a month, a quarter, or a year.
Fiscal year vs. calendar year.
Accountants divide the economic life of a business into artificial time periods (Periodicity Assumption).
Jan.
Feb.
Mar.
Apr.
Dec.
. . . . .
▼ HELPFUL HINT
An accounting time period that is one year long is called a fiscal year.
4-‹#›
Periodicity Assumption
Review Question
What is the periodicity assumption?
Companies should recognize revenue in the accounting period in which it is earned.
Companies should match expenses with revenues.
The economic life of a business can be divided into artificial time periods.
The fiscal year should correspond with the calendar year.
LO 1
4-‹#›
Companies recognize revenue in the accounting period in which the performance obligation is satisfied.
REVENUE RECOGNITION PRINCIPLE
LO 1
4-‹#›
TEACHING TIP
Service businesses recognize revenue when the services are performed, although many customers may have been billed for the services (on account). The cash has not been received; however, the services have been performed. Therefore, revenue should be recognized.
Illustration: Assume Conrad Dry Cleaners cleans clothing on June 30, but customers do not claim and pay for their clothes until the first week of July. The journal entries for June and July would be:
REVENUE RECOGNITION PRINCIPLE
LO 1
4-‹#›
“Let the expenses follow the revenues.”
ILLUSTRATION 4-1
EXPENSE RECOGNITION PRINCIPLE
LO 1
4-‹#›
ILLUSTRATION 4-1
GAAP relationships in revenue and expense recognition
EXPENSE RECOGNITION PRINCIPLE
LO 1
4-‹#›
INVESTOR INSIGHT
Reporting Revenue Accurately
The Until recently, electronics manufacturer Apple was required to spread the revenues from iPhone sales over the two-year period following the sale of the phone. Accounting standards required this because Apple was obligated to provide software updates after the phone was sold. Since Apple had service obligations after the initial date of sale, it was forced to spread the revenue over a two-year period. As a result, the rapid growth of iPhone sales was not fully reflected in the revenue amounts reported in Apple’s income statement. A new accounting standard now enables Apple to report much more of its iPhone revenue at the point of sale. It was estimated that under the new rule revenues would have been about 17% higher and earnings per share almost 50% higher.
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Transactions recorded in the periods in which the events occur.
Revenues ar ...
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4-‹#›Accrual Accounting ConceptsKimmel ● Weygandt .docx
4-‹#›
Accrual Accounting Concepts
Kimmel ● Weygandt ● Kieso
Financial Accounting, Eighth Edition
4
4-‹#›
Prepare adjusting entries for deferrals.
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Explain the accrual basis of accounting and the reasons for adjusting entries.
1
2
LEARNING OBJECTIVES
Prepare adjusting entries for accruals.
3
Prepare an adjusted trial balance and closing entries.
4
4-‹#›
LEARNING OBJECTIVE
Explain the accrual basis of accounting and the reasons for adjusting entries.
1
LO 1
Generally a month, a quarter, or a year.
Fiscal year vs. calendar year.
Accountants divide the economic life of a business into artificial time periods (Periodicity Assumption).
Jan.
Feb.
Mar.
Apr.
Dec.
. . . . .
▼ HELPFUL HINT
An accounting time period that is one year long is called a fiscal year.
4-‹#›
Periodicity Assumption
Review Question
What is the periodicity assumption?
Companies should recognize revenue in the accounting period in which it is earned.
Companies should match expenses with revenues.
The economic life of a business can be divided into artificial time periods.
The fiscal year should correspond with the calendar year.
LO 1
4-‹#›
Companies recognize revenue in the accounting period in which the performance obligation is satisfied.
REVENUE RECOGNITION PRINCIPLE
LO 1
4-‹#›
TEACHING TIP
Service businesses recognize revenue when the services are performed, although many customers may have been billed for the services (on account). The cash has not been received; however, the services have been performed. Therefore, revenue should be recognized.
Illustration: Assume Conrad Dry Cleaners cleans clothing on June 30, but customers do not claim and pay for their clothes until the first week of July. The journal entries for June and July would be:
REVENUE RECOGNITION PRINCIPLE
LO 1
4-‹#›
“Let the expenses follow the revenues.”
ILLUSTRATION 4-1
EXPENSE RECOGNITION PRINCIPLE
LO 1
4-‹#›
ILLUSTRATION 4-1
GAAP relationships in revenue and expense recognition
EXPENSE RECOGNITION PRINCIPLE
LO 1
4-‹#›
INVESTOR INSIGHT
Reporting Revenue Accurately
The Until recently, electronics manufacturer Apple was required to spread the revenues from iPhone sales over the two-year period following the sale of the phone. Accounting standards required this because Apple was obligated to provide software updates after the phone was sold. Since Apple had service obligations after the initial date of sale, it was forced to spread the revenue over a two-year period. As a result, the rapid growth of iPhone sales was not fully reflected in the revenue amounts reported in Apple’s income statement. A new accounting standard now enables Apple to report much more of its iPhone revenue at the point of sale. It was estimated that under the new rule revenues would have been about 17% higher and earnings per share almost 50% higher.
Apple Inc.
LO 1
4-‹#›
Accrual-Basis Accounting
Transactions recorded in the periods in which the events .
How to Prepare Statement of Cash Flows in 6 Steps
Are you looking for accounting services in Mississauga? visit H&T Accounting Services. We have 25 years of experience in Accounting Services. We can provide you the most excellent solutions for all types of accounting, bookkeeping and tax problems.
Chap 4
This document discusses the accounting cycle and how to prepare a worksheet. It explains that a worksheet is used to record trial balances, adjustments, and financial statement preparation. The document outlines the steps in the accounting cycle and types of accounts. It also describes the sections of a classified balance sheet, including current and long-term assets/liabilities, as well as owner's equity.
Ch04
This document provides an overview of the key learning objectives and content to be covered in a chapter on income statements and related information. The chapter will cover understanding the uses and limitations of income statements, their required components and format, how to prepare them, and how to report various items within the statement. It will also cover earnings per share calculations and the reporting of discontinued operations, accounting changes, errors and other comprehensive income. The document outlines the chapter's objectives and provides examples to illustrate important concepts related to income statement preparation and components.
Ch04
This document provides an overview of key learning objectives and concepts to be covered in a chapter on income statements and related information. The chapter will cover understanding the uses and limitations of income statements, their content and format, how to prepare them, and how to report various items. It will also cover earnings per share information, intraperiod tax allocation, accounting changes and errors, retained earnings statements, and other comprehensive income. The document outlines these learning objectives and concepts through a series of slides, providing definitions, examples, and illustrations.
Accounting Principles, 12th ch4
The document discusses the steps in preparing a worksheet. It begins by explaining how to prepare a trial balance on the worksheet by transferring account balances from the ledger. The second step is to enter adjusting entries in the adjustments columns. The third step is to complete the adjusted trial balance columns by totaling debits and credits. The fourth step extends adjusted account balances to the appropriate financial statement columns. The final step is to compute net income or loss by totaling the columns and determining the difference between revenues and expenses.
Completing the accounting cycle - Chapter four Accounting principles
Completing the accounting cycle - Chapter four Accounting principles
Accrual Accounting ConceptsKimmel ● Weygandt ● KiesoAccounti.docx
Accrual Accounting Concepts
Kimmel ● Weygandt ● Kieso
Accounting, Sixth Edition
4
4-‹#›
Prepare adjusting entries for deferrals.
CHAPTER OUTLINE
Explain the accrual basis of accounting and the reasons for adjusting entries.
1
2
LEARNING OBJECTIVES
Prepare adjusting entries for accruals.
3
Prepare an adjusted trial balance and closing entries.
4
4-‹#›
LEARNING OBJECTIVE
Explain the accrual basis of accounting and the reasons for adjusting entries.
1
LO 1
Generally a month, a quarter, or a year.
Fiscal year vs. calendar year.
Accountants divide the economic life of a business into artificial time periods (Periodicity Assumption).
Jan.
Feb.
Mar.
Apr.
Dec.
. . . . .
▼ HELPFUL HINT
An accounting time period that is one year long is called a fiscal year.
4-‹#›
Periodicity Assumption
Review Question
What is the periodicity assumption?
Companies should recognize revenue in the accounting period in which it is earned.
Companies should match expenses with revenues.
The economic life of a business can be divided into artificial time periods.
The fiscal year should correspond with the calendar year.
LO 1
4-‹#›
Companies recognize revenue in the accounting period in which the performance obligation is satisfied.
REVENUE RECOGNITION PRINCIPLE
LO 1
4-‹#›
TEACHING TIP
Service businesses recognize revenue when the services are performed, although many customers may have been billed for the services (on account). The cash has not been received; however, the services have been performed. Therefore, revenue should be recognized.
Illustration: Assume Conrad Dry Cleaners cleans clothing on June 30, but customers do not claim and pay for their clothes until the first week of July. The journal entries for June and July would be:
REVENUE RECOGNITION PRINCIPLE
LO 1
4-‹#›
“Let the expenses follow the revenues.”
ILLUSTRATION 4-1
EXPENSE RECOGNITION PRINCIPLE
LO 1
4-‹#›
ILLUSTRATION 4-1
GAAP relationships in revenue and expense recognition
EXPENSE RECOGNITION PRINCIPLE
LO 1
4-‹#›
INVESTOR INSIGHT
Reporting Revenue Accurately
The Until recently, electronics manufacturer Apple was required to spread the revenues from iPhone sales over the two-year period following the sale of the phone. Accounting standards required this because Apple was obligated to provide software updates after the phone was sold. Since Apple had service obligations after the initial date of sale, it was forced to spread the revenue over a two-year period. As a result, the rapid growth of iPhone sales was not fully reflected in the revenue amounts reported in Apple’s income statement. A new accounting standard now enables Apple to report much more of its iPhone revenue at the point of sale. It was estimated that under the new rule revenues would have been about 17% higher and earnings per share almost 50% higher.
Apple Inc.
LO 1
4-‹#›
Accrual-Basis Accounting
Transactions recorded in the periods in which the events occur.
Revenues ar ...
CASH FLOW STATEMENT
The document provides an overview of cash flow statements, including:
- The purpose is to present cash inflows and outflows for a reporting period to show the ability of an organization to generate cash and how funds are used.
- There are two main methods for presenting cash flows - the direct method shows specific cash flows like receipts/payments, while the indirect method uses net income as a starting point and adjusts for non-cash items.
- Non-cash transactions like asset purchases through loans do not involve cash but still impact financial reports, so are accounted for in cash flow statements.
ACCT11__1_Introduction to Accounting.pptx
This document provides an introduction to accounting concepts including the four phases of accounting (recording, classifying, summarizing, and interpreting), business organizations, accounting elements and values, the accounting cycle, and examples of basic business transactions. It defines accounting and explains why the study of accounting is needed. It also outlines the key steps in the accounting cycle including journalizing, posting to ledgers, preparing a trial balance and financial statements, and interpreting financial results.
Statements And Transactions
The document discusses key financial statements and Generally Accepted Accounting Principles (GAAP). It describes the four main financial statements - balance sheet, income statement, statement of owner's equity, and statement of cash flows - and what each reports. It also explains several important GAAP principles, including the business entity principle, objectivity principle, cost principle, going concern principle, monetary unit principle, and revenue recognition principle. These principles are designed to make financial statement information relevant, reliable, consistent and comparable.
MBA249 Chap 2 Acctg.ppt
This document discusses key components of financial statement analysis. It explains that a balance sheet provides a snapshot of a company's financial position at a point in time, showing assets equal to liabilities plus equity. An income statement measures revenues and expenses to determine income/profit. The statement of cash flows reconciles a company's operating, investing, and financing cash flows with changes in cash. Ratio analysis compares various financial metrics over time and against industry peers to evaluate a company's liquidity, asset use, debt levels, profitability, and market value. The overall goal is for managers to focus on cash flows to ensure a company can meet obligations and fund current and future operations.
L 13 chapter financial statement and cash flow analysis
This document discusses key aspects of financial statement and cash flow analysis. It covers the main financial statements including the balance sheet, income statement, statement of retained earnings, and statement of cash flows. It also discusses cash flow analysis, different types of ratios used to analyze financial performance (liquidity, activity, debt, profitability, market), and how to benchmark performance over time and against industry peers. The overall purpose is to analyze a company's financial position and performance through its financial statements and key metrics.
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Chapter 6 on Valuation and Reporting in Organization
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4-‹#›Accrual Accounting ConceptsKimmel ● Weygandt .docx
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Completing the accounting cycle - Chapter four Accounting principles
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Accounting principle chapter 4.pptx
- 1. Chapter 4-1 CHAPTER 4 COMPLETING THE ACCOUNTING CYCLE Accounting Principles, Eighth Edition
- 2. Chapter 4-2 Summary of the Accounting Cycle 1. Analyze business transactions 2. Journalize the transactions 6. Prepare an adjusted trial balance 7. Prepare financial statements 8. Journalize and post closing entries 9. Prepare a post-closing trial balance 4. Prepare a trial balance 3. Post to ledger accounts 5. Journalize and post adjusting entries Illustration 4-12 LO 4 State the required steps in the accounting cycle.
- 3. Chapter 4-3 Correcting entries are unnecessary if the records are error-free. are made whenever an error is discovered. must be posted before closing entries. Instead of preparing a correcting entry, it is possible to reverse the incorrect entry and then prepare the correct entry. Correcting Entries—An Avoidable Step LO 5 Explain the approaches to preparing correcting entries.
- 4. Chapter 4-4 BE4-9 At Batavia Company, the following errors were discovered after the transactions had been journalized and posted. Prepare the correcting entries. 1. A collection on account from a customer was recorded as a debit to Cash and a credit to Service Revenue for $780. Correcting Entries—An Avoidable Step LO 5 Explain the approaches to preparing correcting entries. Cash 780 Incorrect entry Service revenue 780 Cash 780 Correct entry Accounts receivable 780 Service revenue 780 Correcting entry Accounts receivable 780
- 5. Chapter 4-5 BE4-9 At Batavia Company, the following errors were discovered after the transactions had been journalized and posted. Prepare the correcting entries. 2. The purchase of supplies on account for $1,570 was recorded as a debit to Store Supplies and a credit to Accounts Payable for $1,750. Correcting Entries—An Avoidable Step Look page 157 -159 Store Supplies 1,750 Incorrect entry Accounts payable 1,750 Store Supplies 1,570 Correct entry Accounts payable 1,570 Accounts payable 180 Correcting entry Store Supplies 180
- 6. Chapter 4-6 The Classified Balance Sheet Look illustration 4-18 page 160 Presents a snapshot at a point in time. To improve understanding, companies group similar assets and similar liabilities together. Assets Liabilities and Owner’s Equity Current assets Current liabilities Long-term investments Long-term liabilities Property, plant, and equipment Owner’s equity Intangible assets Illustration 4-17 Standard Classifications
- 7. Chapter 4-7 The Classified Balance Sheet Assets that a company expects to convert to cash or use up within one year or the operating cycle, whichever is longer. Operating cycle is the average time it takes from the purchase of inventory to the collection of cash from customers. Current Assets
- 8. Chapter 4-8 The Classified Balance Sheet Companies usually list current asset accounts in the order they expect to convert them into cash. Illustration 4-19 Current Assets
- 9. Chapter 4-9 Cash, and other resources that are reasonably expected to be realized in cash or sold or consumed in the business within one year or the operating cycle, are called: a. Current assets. b. Intangible assets. c. Long-term investments. d. Property, plant, and equipment. Review Question The Classified Balance Sheet LO 6 Identify the sections of a classified balance sheet.