Week 4 Have a closer look at year end adjustments (student) (2020)-converted.pdf

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ACCT2010Principles ofAccounting IA closer look at year endadjustments1
Relevant readings1.Chapter 4Key points (textbook page reference)a.Adjusting revenues & expenses pp.170-174b.Deferred & accrued revenues pp.174-176c.Deferred (prepaid) & accrued expenses pp.176-181d.Relationship between income statement & balance sheet pp.183-184e.Financial analysis toolsearnings per share p.186 and total assetturnover ratio p.1892.Demonstration CaseTerrific Lawn Maintenance Corporationpp.194-1982
ContentI.What are adjusting entries and Why neededII.Deferred & accrued revenuesIII.Deferred & accrued expensesIV.Preparing financial statements from adjusted trial balanceV.Financial analysis tool3
ACCT2010Principles ofAccounting II.What are the adjusting entriesand Why needed4
What are adjusting entries & Why needed1.Revisit the accounting cycle5
What are adjusting entries & Why needed2.Unadjusted trial balance (TB) - revisita.A listing of individual accounts in general ledger, in financialstatement orderb.Account ending balances, where Dr. and Cr. Balances are listed intwo separate columnsc.Total Dr. = total Cr.d.Watch the video again-o3ItE0sbk6
What are adjusting entries & Why needed3.How a typical TB looks like …7
What are adjusting entries & Why needed3.How a typical TB looks like … (Continued)8
What are adjusting entries & Why needed4.Why adjusting entries are needed (Purpose of adjustments)a.Adjustments arerequired at the end of eachaccounting periodb.In order toget the revenues & expenses into the “right”period9
What are adjusting entries & Why needed5.Types of adjustments10
Match business situations with termsBusiness situationsRevenue not yet earned; collected inadvanceRent not yet collected; already earnedProperty taxes incurred; not yet paidRent revenue collected; not yet earnedTerms11
Match business situations with termsBusiness situationsAn expense incurred; not yet paid or recordedOffice supplies on hand to be used next periodAn expense not yet incurred; paid in advanceA revenue earned; not yet collectedTerms12
ACCT2010Principles ofAccounting III.

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Generally Accepted Accounting Principles, Papa John

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