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1、Presented by Annie ChenThe Department of Accounting,GDUF,Chapter 3,The Accounting Cycle-Capturing Economic Events,This chapter demonstrates how accounting systems record economic events related to a variety of business transactions.,The Role of Accounting Records,Establishes accountability for asset
2、s and transactions.,Keeps track of routine business activities.,Obtains detailed information about a particular transaction.,Evaluates efficiency and performance within company.,Maintains evidence of a companys business activities.,P86,STILL REMEMBER?,LEGDER ACCOUNT,LEGDER,JOURNAL,POSTING,A,B,JOURNA
3、L,LEDGER ACCOUNT,The Ledger Accountand The Ledger,The entire group of accounts is kept together in an accounting record called a ledger.,Accounts are individual records showing increases and decreases.,Transactions are initially recorded in the journal rather than the ledger account. The journal rec
4、ords transactions in chronological (day by day) order. The ledger groups together all transactions that impact a particular account.,You can refer all these important terms to your textbook easily with the glossary after chapter. (Chapter 3 glossary: p113),Debit/Credit Skill TestsP117 Q4P118 BE3.4,D
5、ebits and credits affect accounts as follows:,Debit and Credit Rules,In the double-entry accounting system, every transaction is recorded by equal dollar amounts of debits and credits.,A = L + OE,Lets record selected transactions for Overnight Auto Service in the accounts.,Jan 20: Michael McBryan an
6、d family invested $80,000 in exchange for capital stock.,Jan 20: Michael McBryan and family invested $80,000 in exchange for capital stock.,Representing Overnight, McBryan negotiated with both the City of Santa Teresa and Metropolitan Transit Authority to purchase an abandoned bus garage. (The city
7、owned the land but the MTA owned the building.) On January 21, Overnight Auto Service purchased the land from the city for $52,000 cash.,Representing Overnight, McBryan negotiated with both the City of Santa Teresa and Metropolitan Transit Authority to purchase an abandoned bus garage. (The city own
8、ed the land but the MTA owned the building.) On January 21, Overnight Auto Service purchased the land from the city for $52,000 cash.,Jan 22: Overnight completed the acquisition of its business location by purchasing the abandoned building from the MTA. The purchase price was $36,000; Overnight made
9、 a $6,000 cash down payment and issued a 90-day, non-interest-bearing note payable for the remaining $30,000.,Jan 22: Overnight completed the acquisition of its business location by purchasing the abandoned building from the MTA. The purchase price was $36,000; Overnight made a $6,000 cash down paym
10、ent and issued a 90-day, non-interest-bearing note payable for the remaining $30,000.,Jan 23: Overnight purchased tools and equipment on account from Snappy Tools. The purchase price was $13,800, due in 60 days.,Jan 23: Overnight purchased tools and equipment on account from Snappy Tools. The purcha
11、se price was $13,800, due in 60 days.,Jan 24: Overnight sold the excess tools on account to Ace Towing at a price of $1,800, a price equal to Overnights cost.,Jan 24: Overnight sold the excess tools on account to Ace Towing at a price of $1,800, a price equal to Overnights cost.,Jan 26: Overnight re
12、ceived $600 in partial collection of the account receivable from Ace Towing.,Jan 26: Overnight received $600 in partial collection of the account receivable from Ace Towing.,Jan 27: Overnight made a $6,800 partial payment of its accounts payable to Snappy Tools.,Jan 27: Overnight made a $6,800 parti
13、al payment of its accounts payable to Snappy Tools.,In an actual accounting system, transactions are initially recorded in the journal.,The Journal,Posting involves copying information from the journal to the ledger accounts.,Posting Journal Entries to the Ledger Accounts,Posting Journal Entries to
14、the Ledger Accounts,Posting Journal Entries to the Ledger Accounts,Lets see what the cash account looks like after posting the cash portion of this transaction for Overnight Auto Service.,Posting Journal Entries to the Ledger Accounts,This ledger format is referred to as a running balance.,Ledger Ac
15、counts After Posting,Ledger Accounts After Posting,T accounts are simplified versions of the ledger account that only show the debit and credit columns.,Net Income,Net income an increase in owners equity from profits of the business.,A = L + OE,Retained Earnings,A = L + OE,Capital Stock,Retained Ear
16、nings,The balance in the Retained Earnings account represents the total net income of the corporation over the entire lifetime of the business, less all amounts which have been distributed to the stockholders as dividends.,Revenues and Expenses,Revenues and Expenses,The price for goods sold and serv
17、ices rendered during a given accounting period.,Increases owners equity.,The costs of goods and services used up in the process of earning revenue.,Decreases owners equity.,REVENUES,EXPENSES,The Realization Principle: When To Record Revenue,Realization PrincipleRevenue should be recognized at the ti
18、me goods are sold and services are rendered.,Matching Principle: When To Record Expenses,Matching PrincipleExpenses should be recorded in the period in which they are used up.,WHISTLE-BLOWING,Whistle Blower:One who reveals wrongdoing within an organization to the public or to those in positions of authority.,WHISTLE-BLOWING,Federal government of the United Statess whistleblower awareness poster,TIME 2019 PERSONS OF THE YEAR,The Accounting Cycle,End of Chapter 3,Thank You!,45,谢谢！,
