Financial Accounting Common

1. Depreciation Methods

7. Double declining balance depreciation

13. 4 DIFFERENT TIMELINE ACCTS

14. ACCRUED REVENUE

15. ACCRUED EXPENSE

16. ACCRUED EXPENSE

17. UNEARNED REVENUE

18. UNEARNED REVENUE

19. PREPAID EXPENSE

20. PREPAID EXPENSE

21. CLOSING ENTRIES

24. Journalizing the Closing Entries April 30 Service Revenue 7,400 Retained Earnings 7,400 April 30 Retained Earnings 4,415 Rent Expense 1,000 Salary Expense 1,900 Supplies Expense 300 Depreciation Expense 275 Utilities Expense 400 Income Tax Expense 540 April 30 Retained Earnings 3,200 Dividends 3,200

25. Posting the Closing Entries Retained Earnings 4,415 3,200 11,250 7,400 11,035 Service Revenue 7,400 7,000 250 150 7,400 Rent Expense 1,000 1,000 Other Expenses 1,515 1,515 Dividends 3,200 3,200 Salary Expense 950 950 1,900 1,900

27. Classifying Assets and Liabilities Current assets Long-term assets Current liabilities Long-term liabilities

28. Correction of posting errors

31. Perpetual vs. Periodic System Balances should now be correct Transfer Purchases balance to Cost of Goods Sold Other procedures: Adjust Inventory balance to agree with year-end physical count and merchandise value Adjust Inventory balance to agree with year-end physical count and merchandise value Year-end procedures: Merchandise cost is transferred from Inventory to Cost of Goods Sold -an Income Statement account No adjustment to inventory is necessary; merchandise cost is already on the Income Statement When a sale is made: Balance Sheet Income Statement Appears on: Inventory Purchases Account used to record inventory purchases: Perpetual Periodic Method >>>