AccountingBasics英語會計基礎(chǔ)教學(xué)ppt課件

1、AMonday11:3041-203BMonday15:3019-G006CWednesday12:3019-2043DThursday9:3019-G006EThursday12:3019-2085FFriday12:3019-G007Dont forget yourDont forget yourPASS Session!PASS Session!.au/student/services/pass In Autumn 2019, students who regularly* attended PASS scored 11 marks higher on average th

2、an non-attending students. Students who did not attend PASS were also 5 times as likely to fail.Chapter 3: Adjusting the accountsWeek 32BEFORE WE START.C = CREDITD = DEBITNormal balance of these accounts is a debit. To increase balance debit again, to decrease credit out of the account.Normal balanc

3、e of these accounts is a credit. To increase balance credit again, to decrease debit out of the account.Before we start4DRD+A+X=C+I+LCRWhat is the normal balance ofAccounts receivable?Accounts payable?Machinery?Tax expense?Dividends/Drawings?Share capital?Retained earnings?Sales revenue?Before we st

4、artoLast week we looked at transactions analysis, journal entries and general ledger accountsElena Lee example5BasicanalysisDebit-creditanalysisTransaction1 October, office rent for October is paid in cash, $1800The expense Rent is increased $1800 because the payment pertains only to the current mon

5、th; the asset Cash is decreased $1800Debits increase expenses: debit Rent Expense $1800Credits decrease assets: credit Cash $1800Before we start6Journal entryPostingDebit-creditanalysisDebits increase expenses: debit Rent Expense $1800Credits decrease assets: credit Cash $1800Oct 1 Rent Expense 601

6、1800 Cash 101 1800 (Paid October rent) Cash 101 Oct 1 800 Rent Expense 601Oct 1 1800This week7 Accrual versus cash basis of accountingRevenue recognition criteriaExpense recognition criteriaTypes of adjusting entriesPrepaymentsAccrualsAdjusted trial balanceWorksheetsFinancial statements from workshe

7、etsAccrual versus cash basis of accountingCash-based accountingCash-based accountingAccrual-based accountingAccrual-based accounting8Revenue recognised when the cash is received or paid.Expenses recognised when the cash is received or paidRevenue recognised when goods and services are providedExpens

8、es recognised when assets are consumed or liabilities incurredCash versus accrual basis9Accrual basis Income example: assume Penny received $20,000 in cash for sales during 2019 and charged clients $2,400 which was to be paid in the following year. How much revenue should Penny record for 2019?Reven

9、ue for 2019 would be $22,400Why?Sales Cash $20,000Sales Accounts receivable $ 2,400Total sales for 2019$22,400Cash versus accrual basis10Accrual basis Expenses example: Pennys phone bill for March was $400 but she doesnt receive the bill until April. When should Penny record the telephone expense?Th

10、e $400 is still a March expense because this is the period in which the expense was incurred. The actual cash wont go out until April, but the expense is still a March expense.Why do we need adjusting entries?11Its a timing issue and related to the period assumption. Because sometimes transactions e

11、ffect two or more accounting periods we need to make sure income and expenses are recorded in the correct period We need to make sure that asset and liability balances are accurately reflected at the end of the accounting periodAdjusting entries occur after the transactions have been recorded and po

12、sted, but before the financial statements are preparedTypes of adjusting entries 12Types of adjusting entries13Adjusting entries14One side of the adjusting journal entry affects an account reported in the income statement (ie revenue or expense) and the other side of the entry affects an account rec

13、orded in the balance sheet (asset or liability)The cash account is never adjusted because the cash flow occurs before or after the reporting dateAn example: Bazinga Inc15Bazinga Inc is a comic book store in Pasadena, California. It is owned and managed by four friends: Sheldon, Leonard, Howard, and

14、Raj. The Trial Balance as at June 2019 for the company, before adjusting entries are made, is shown on the following slide16An example: Bazinga Inc, year end infoWhen doing adjusting entries, you will need to determine what information is available at the end of the accounting period so that you can

15、 calculate the correct balances for assets and liability accounts and determine the amounts to be included as revenue and expenses. In ACCY901, this type of information will be given to you.(a) Supplies on hand at the end of the period were $8,000 (b) The useful life of shop fittings was 5 years and

16、 the residual value is $5,000. (c) A three year insurance policy was purchased on 1 July 2021. (d) The business employs one sales assistant who is paid $1,000 for a five day working week and is paid every Friday. Balance day is a Wednesday. (e) Comic books worth $3,500 were sent to a collector with

17、an invoice on 29 June 2019. (f) The subscription revenue recorded in the unearned revenue account were for a two-year period, therefore half of this money was earned at year end 17(a) Supplies on hand at the end of the period were $8,000 Type of adjusting entry prepayment cost paid for before consum

18、edIn the unadjusted trial balance, supplies at the beginning of the period were $12,500Therefore, an adjusting entry is required to reduce the balance to $8,000DateDescriptionDebitCredita30/6Supplies expense Supplies(to reduce supplies account to $8000)(b) The useful life of shop fittings was 5 year

19、s and the residual value is $5,000. Type of adjusting entry prepayment depreciationAdjusting entry for depreciation expenseAnnual depreciation expense = (cost residual value)/estimated useful lifeAnnual depreciation expense = ($15,000-$5,000)/5 yearsDateDescriptionDebitCreditb30/06Dep exp fittings A

20、ccum dep fittings(to record dep expense for the year)(c) A three year insurance policy was purchased on 1 July 2021. Type of adjusting entry prepayment prepaid expenseInsurance policy purchased at the beginning of the current year. Valid for three years. Adjusting entry records expiration of policy

21、over this period. DateDescriptionDebitCreditc30/06Insurance expense Prepaid insurance(to record insurance expense for the year)(d) The business employs one sales assistant who is paid $1,000 for a five day working week and is paid every Friday. Balance day is a Wednesday. Type of adjusting entry acc

22、rual unrecorded expensesWork out: how much is paid per day AND how many days fall between date of last pay and balance date.DateDescriptionDebitCreditd30/06Salary expense Salaries payable(to record salaries owed but not yet paid)(e) Comic books worth $3,500 were sent to a collector with an invoice o

23、n 29 June 2019.Type of adjusting entry accrual unrecorded revenueAdjusting entry for unrecorded revenueDateDescriptionDebitCredite30/06 (to record revenue earned but not yet received)(f) The subscription revenue recorded in the unearned revenue account were for a two-year period, therefore half of t

24、his money was earned at year endType of adjusting entry deferral unearned revenueAdjusting entry for unearned revenue now earnedDateDescriptionDebitCreditf30/06 (to record unearned revenue earned during the year)An example: Bazinga Inc24Once adjusting entries are posted to ledger accounts, new total

25、s are calculated and an adjusted trial balance is takenAfter the adjusting process is completed, the adjusted trial balance is used to prepare the financial statementsWe will use worksheets to help us with this processUsing a worksheet25Why use a worksheet?It helps to compile the information necessa

26、ry for the preparation of the financial statementsThe balances of ledger accounts appear in one locationThe affect of adjustments can be viewed easily and corrected if necessaryBecause the adjusted trial balance is easily visible, the worksheet can simplify the preparation of financial statementsWha

27、t does a worksheet look like?26An example: Bazinga Inc27Once the adjustments are entered, the adjusted balances are extended to the appropriate columns in the adjusted trial balance.Expenses debit columnRevenue credit columnAssets and dividends/drawings debit columnsLiabilities, equity, contra asset

28、s credit columns28An example: Bazinga Inc29Finally, the amounts in the adjusted trial balance are entered in the income statement and balance sheet columns. Expenses = debit column of income statementRevenue = credit column of income statementAssets and dividends/drawings = debit column of balance s

29、heetLiabilities, equity, contra assets = credit column of balance sheetThese columns are then used to prepare the financial statements30Income statement from worksheet31Statement of changes in equity32Retained earnings, beginning21,500 Add: net profit24,150 45,650 Less: dividends - Retained earnings

30、, 30 June 201945,650 Bazinga IncStatement of Changes in Equityfor the year ended 30 June 2019Balance sheet from worksheet33Chapter 4: Completion of the accounting cycleWeek 334Closing entriesTo make the accounts ready for the next accounting period, the books must be closed. Understand the differenc

31、e betweenTemporary (or nominal) accountsPermanent (or real) accountsTemporary accounts include all the income statement accounts and dividend/drawing accounts that are useful for one period only (to determine profit for the year). These accounts are closed at the end of the year.Permanent accounts i

32、nclude all balance sheet accounts and relate to one or more accounting periods. These accounts are not closed. 35Preparing closing entriesClosing entries Formally transfer profit or loss and owners drawings or dividends to owners capitalProduce a zero balance in each temporary accountProfit and Loss

33、 SummaryThis is another temporary account which is used to help with the closing processThis account is also closed (example coming!)36The closing process1 Close revenue accounts to Profit and Loss Summary2 Close expenses accounts to Profit and Loss Summary37(Individual)RevenueProfit and LossSummary

34、(Individual)Expenses12The closing process continued3 Close Profit & Loss Summary to Retained earnings38Profit and LossSummaryRetained earnings3The closing process continued4 Close Dividends to Retained earnings39Retained earningsDividends4Closing Entries Illustrated: Bazinga Inc40 GENERAL JOURNAL J3

35、Date Account titles and explanations Ref. Debit Credit2019June 30 Sales Revenue 32 250 Profit & Loss Summary 32 250 (To close income account) 30 Profit & Loss Summary 8 100 Supplies Expense 4 500 Depreciation Expense - fittings 2 000 Insurance Expense 1 000 Salaries Expense 600 (To close expense accounts) 30 Profit & Loss Summary 24 150 Retained earnings 24 150 (To close Profit and Loss Summary account and transfer profit to Retained Earnings) IF THERE HAD BEEN A DIVIDEND PAID 30 Retained earnings 500 Dividends 500 (To close dividends and recognise decrease