Chapter 3.pptx - FINANCIAL MANAGERIAL ACCOUNTING for...

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FINANCIAL & MANAGERIAL ACCOUNTING for Decision Makers 3e DYCKMAN HANLON MAGEE PFEIFFER HARTGRAVES MORSE Adjusting Accounts for Financial Statements CHAPTER 3 © Cambridge Business Publishers, 2018
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Learning Objective © Cambridge Business Publishers, 2018 2 Identify the major steps in the accounting cycle. 1
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Abbreviated Accounting Cycle © Cambridge Business Publishers, 2018 3 A sequence of activities to accumulate and report financial statements Steps in the accounting cycle Steps performed daily, monthly, quarterly, or end of fiscal year; not all at the same time Accounting Cycle—Abbreviated Continuously End of Accounting Period (Monthly, Quarterly, Annually)
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Learning Objective © Cambridge Business Publishers, 2018 4 Review the process of journalizing and posting transactions. 2
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Chart of Accounts © Cambridge Business Publishers, 2018 5 Lists the titles and numbers of all accounts found in the general ledger
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Review of Accounting Documents © Cambridge Business Publishers, 2018 6 General journal Tabular, chronological record where business activities are captured in debits and credits General ledger Listing of all accounts and their balances Accounts are grouped in five elements Assets Liabilities Equity Revenues Expenses
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Journalizing and Posting © Cambridge Business Publishers, 2018 7 Journalize Recording a transaction in a journal Posting Occurs after transactions are journalized Debits and credits in each journal entry are transferred to their related general ledger accounts Record in Journal Post to the Ledger
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Record a Note Signed © Cambridge Business Publishers, 2018 8 1. On June 1, Jana Juice signed a 2-year note to borrow $12,000 and agreed to pay 12% annual interest on the first day of each month with the principal due at the end of two years. Balance Sheet Income Statement Transaction Cash Asset + Noncash Asset = Liabilities + Contrib. Capital + Earned Capital Revenues Expenses = Net Income Signed note and received $12,000 cash +12,000 Cash = +12,000 Notes Payable = (1) Cash (+A) 12,000 Notes payable (+L) 12,000 Borrow $12,000 on a 2-year note. Cash (A) Notes Payable (L) (1) 12,000 12,000 (1)
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Record Purchase of Long-Term Assets © Cambridge Business Publishers, 2018 9 2. On June 1, Jana Juice purchased and installed new fixtures and equipment for $10,200. Balance Sheet Income Statement Transaction Cash Asset + Noncash Asset = Liabilities + Contrib. Capital + Earned Capital Revenues Expenses = Net Income Pay $10,200 cash for fixtures and equipment –10,200 Cash +10,200 Fixtures & Equipment = = (2) Fixtures & Equipment (+A) 10,200 Cash (–A) 10,200 Purchase fixtures and equipment for cash. Fixtures & Equipment (A) Cash (A) (2) 10,200 10,200 (2)
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Record Advertising Expense © Cambridge Business Publishers, 2018 10 3. On June 8, Jana Juice paid $800 in cash to advertise in the local newspaper for June.
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