Week+4+Have+a+closer+look+at+year+end+adjustments+(instructor)+(2019).pptx

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ACCT2010Principles ofAccounting IA closer look at year endadjustments1
Relevant readings1.Chapter 4 – Key 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 tools – earnings per share p.186 and total assetturnover ratio p.1892.Demonstration Case – Terrific Lawn MaintenanceCorporation pp.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 toolVI.Class activitiesa.Recording adjusting entries & complete the TB worksheetb.Recording adjusting entries3
ACCT2010Principles ofAccounting II.What are the adjustingentries and 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, infinancial statement orderb.Account ending balances, where Dr. and Cr. Balances arelisted in two separate columnsc.Total Dr. = total Cr.d.Watch the video again6
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 ofadjustments)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 withtermsBusiness situationsRevenue not yet earned; collected inadvanceRent not yet collected; already earnedProperty taxes incurred; not yet paidRent revenue collected; not yet earnedTermsDeferred revenue / unearnedrevenue / contractual obligationsAccrued revenue (it’s aboutreceivable)Accrued expense (it’s aboutpayable)Deferred revenue / unearnedrevenue / contractual obligations11
Match business situations withtermsBusiness situationsAn expense incurred; not yet paid orrecordedOffice supplies on hand to be used nextperiodAn expense not yet incurred; paid in advanceA revenue earned; not yet collectedTermsAccrued expense (it’s aboutpayable)Deferred expenseDeferred expenseAccrued revenue (it’s aboutreceivable)12
ACCT2010Principles ofAccounting III.Deferred & accruedrevenues13
Deferred & accrued revenues1.Adjustment process14
Deferred & accrued revenues

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Term
Summer
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Tags
Accounting, Revenue, Generally Accepted Accounting Principles, Papa John

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