W5_lecture_handout_slides

W5_lecture_handout_slides - 1 Week 5: Business Transactions...

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Unformatted text preview: 1 Week 5: Business Transactions and the Accounting Information System Text: Ch.5 (LO 5-6,8) Lecture Exercises: E5.6 extended, Sole Trader exercise, Company exercise Self-Study Exercises: P5.3-P5.4, P5.8 Announcements: Today you elect student representatives Start working on Task 1 of the group assignment Outline Transaction analysis: Exercise 5.6 The accounting worksheet Simplified financial statements Income Statement Statement of Changes in Equity Statement of Financial Position (or Balance Sheet) Recording errors 2 Exercise 5.6 Show what effect the following business transactions, let say during June 2008 , will have on the accounting equation: ABC Pty Ltd Chart of Accounts is : Cash, Accounts Receivable, Office Equipment, Inventory, Sales Revenue, Cost of Goods Sold, Accounts Payable, Share Capital, Retained Earnings Wages Exp, Utilities Exp ! Injection of cash into private company ABC Retailers Pty Ltd " A (Cash) = L + " E (Share Capital) # Paid casual wages $ A (Cash) = L + $ E (Wages Expense) % Sold goods on credit (sale price), that were originally purchased at a different price (cost price) Sale price : " A (A/cs Rec.) = L + " E (Sales Revenue) Cost price : $ A (Inventory) = L + $ E (Cost of Goods Sold) Exercise 5.6 & Purchased goods on credit " A (Inventory) = " L (Accounts Payable) + E Received a gas invoice and paid the account $ A (Cash) = L + $ E (Utilities Expense) ( Owner withdrew computer from business $ A (Office Equipment) = L + $ E (Share Capital) ) Sold goods for cash Sale price : " A (Cash) = L + " E (Sales Revenue) Cost price : $ A (Inventory) = L + $ E (Cost of Goods Sold) * Debtor paid amount outstanding $ A (Accounts Receivable) + " A (Cash) = L + E + Business paid creditor in full $ A (Cash) = $ L (Accounts Payable) + E 3 The Accounting Worksheet A worksheet helps to analyse the dual effect from business transactions, in the same manner like in the previous slides, but in a more readable format The worksheet is a simple table that records the the dual effect of each transaction to each subdivided categories of Assets, Liabilities and Equity (i.e. into accounts) At the end of a period, this table can be used to sum up the transactions for each account and use the totals to prepare financial statements E5.6 extended: prepare June statements ! ABC Pty Ltd Chart of Accounts : Cash, A/cs Receivable, Office Equip, Inventory, A/cs Payable, Share Capital, Retained Earnings, Sales Revenue, Cost of Goods Sold, Wages Exp, Utilities Exp, Tax Exp...
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W5_lecture_handout_slides - 1 Week 5: Business Transactions...

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