Lecture_3_-_The_Accounting_Cycle_(revised) - FNA 1002X...

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Unformatted text preview: FNA 1002X 2007-1st (27/08/2007) by Vincent Chen 1 Lecture 3 The Accounting Cycle (Revised) Sequence of the Accounting Cycle: Step 1: Analyze transactions Step 2: Record the effects of transactions Step 3: Summarize the effects of transactions • Posting journal entries • Preparing a trial balance Step 4: Prepare reports (Lecture 4) • Adjusting entries • Preparing financial statements • Closing the books 1. Analyze transactions • Is this transaction related to the company? • How does this transaction affect the financial positions of the company? Assets = Liabilities + Owners’ Equity Exercise 1: Identify whether the transaction affect the accounting equation Assume NUS Corp is founded on 31/12/2006 and the initial investment from the stockholders is $20,000 (common stock). All is colleted in cash. The following business transactions occur in 2007: 1. John, the CEO of NUS Corp, borrowed $10,000 from POSB 2. Consulting services totaling $210,000 are provided and billed Singapore Airlines 3. Purchase computer equipment for $5,000 on account. FNA 1002X 2007-1st (27/08/2007) by Vincent Chen 2 4. NUS collects $195,000 from Singapore Airlines 5. NUS pays the computer equipment bill 6. NUS pays its office rent for $12,000 7. Wage expense of $110,000 are paid...
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This note was uploaded on 12/23/2009 for the course BIZAD FNA1002X taught by Professor Edmundkeung during the Fall '09 term at National University of Singapore.

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Lecture_3_-_The_Accounting_Cycle_(revised) - FNA 1002X...

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