lec04 - Chapter4:Adjustments,Financial Statements,...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 4: Adjustments, Financial  Statements, and the Quality of Earnings
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Learning Objectives  Understand the accounting cycle Analyze the adjustments  necessary at the end of the  period to update balance sheet and income statement  accounts Prepare four financial statements Explain the closing process
Background image of page 2
Accounting Cycle Prepare financial  statements. Disseminate  statements to users. Close revenues, gains,  expenses, and losses to  Retained Earnings. During the period: Analyze transactions. Record journal entries. Post amounts to general ledger. At the end of the period: Adjust revenues and  expenses. Start of  Period
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Unadjusted Trial Balance A listing of individual accounts, usually in  financial statement order. Ending debit or credit balances are listed  in two separate columns. Total debit account balances  should   equal  total credit account balances. 
Background image of page 4
McGraw-Hill/Irwin Slide 5 Matrix, Inc. Unadjusted Trial Balance At December 31, 2009 Description Debit Credit Cash 3,900 $ Accounts receivable 4,985 Inventory 3,300 Equipment 4,800 Accumulated depreciation - equip. 1,440 $ Furniture and fixtures 6,600 Accumulated depreciation - furn. & fix. 2,200 Accounts payable 2,985 Notes payable 4,000 Common stock 10,000 Retained earnings, 12/31/08 1,760 Sales revenue 35,000 Cost of goods sold 27,500 Operating expenses 6,300 Totals 57,385 $ 57,385 $ Note that total  debits = total  credits
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
McGraw-Hill/Irwin Slide 6 Matrix, Inc. Unadjusted Trial Balance At December 31, 2009 Description Debit Credit Cash 3,900 $ Accounts receivable 4,985 Inventory 3,300 Equipment 4,800 Accumulated depreciation - equip. 1,440 $ Furniture and fixtures 6,600 Accumulated depreciation - furn. & fix. 2,200 Accounts payable 2,985 Notes payable 4,000 Common stock 10,000 Retained earnings, 12/31/08 1,760 Sales revenue 35,000 Cost of goods sold 27,500 Operating expenses 6,300 Totals 57,385 $ 57,385 $ Accumulated depreciation is  contra-asset  account.  It is  directly related to an asset  account but has the opposite  balance.
Background image of page 6
McGraw-Hill/Irwin Slide 7 Matrix, Inc. Unadjusted Trial Balance At December 31, 2009 Description Debit Credit Cash 3,900 $ Accounts receivable 4,985 Inventory 3,300 Equipment 4,800 Accumulated depreciation - equip. 1,440 $ Furniture and fixtures 6,600 Accumulated depreciation - furn. & fix. 2,200 Accounts payable 2,985 Notes payable 4,000 Common stock 10,000 Retained earnings, 12/31/08 1,760 Sales revenue 35,000 Cost of goods sold 27,500 Operating expenses 6,300 Totals 57,385 $ 57,385 $ Cost  - Accumulated depreciation =  BOOK VALUE.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
McGraw-Hill/Irwin Slide 8 Purpose of Adjustments Revenues are  recorded when  earned. Expenses are  recorded when  incurred. Because transactions occur over time, ADJUSTMENTS are required  at the end of each fiscal period to get the revenues and expenses into  the “right” period.
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/28/2010 for the course BUSINESS A ACCT101 taught by Professor Haifengyou during the Fall '10 term at HKUST.

Page1 / 47

lec04 - Chapter4:Adjustments,Financial Statements,...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online