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1、密码：accounting,邮箱：,Chapter 3 Accounting Cycle,Learning Objectives,Understand the concept of accounting cycle,learn to talk about its rolesUnderstand 7 steps of accounting cycle,and compare them with accounting practice in China.Understand the concept of account and its parts in application.Understand
2、 the basic function of journal and its typesLearn to make entries for adjustingLearn to balance accounts,Key words,phrases and special terms,Entry 分录Make an or accounting entryClosing entry 结账分录Contra entry 抵销分录Adjusting entry 调整分录Entry price 入账价格Entry document 记账凭证,Key words,phrases and special ter
3、ms,Journalize 登记日记账dn()laz Journal 日记账，序时账Journal entry 日记账分录Cash journal 现金日记账Post 过账Ledger accounts 分类账led总帐，分户总帐；Account 账户An account is a record based on the items of accounting elements,representing an increase or a decrease and the result of those items.Trial balance 试算平衡表tral试验；审讯；努力,Steps in
4、 the accounting cycle,1、Analyze transactions from source documents2、Record by entries3、Post to accounts4、Adjusting entries5、Journalizing and posting closing entries6、Prepare trial balance7、Prepare financial statements,Steps of The accounting cycle,1.Analyze Transactions,2.Journalize,3.Post,6.Prepare
5、 Financial Statements,5.Close,4.Adjust,Source Documents,Journal Entry,Ledger accounts,Trial Balance,Income statement Accounts,Balance Sheet Income Statementetc,Understand how double-entry accounting works,The mechanics of double-entry accounting are such that every transaction is recorded in the deb
6、it side of one or more accounts and in the credit side of one or more accounts with equal debits and credits.double-entry bookkeeping(or system)single-entry bookkeeping(or system),The Double-Entry Accounting,Debit（Dr.）n.借,借方,借记Debit card 借记卡Debit balance 借方余额 v.计入借方,借计Debit an account 计入借方账Credit（Cr
7、.）n.贷,贷方,贷记Credit card 贷记卡Credit贷方余额 v.计入贷方,贷计Credit an account 计入贷方账,Double-Entry Accounting,“Double-entry accounting is based on a simple concept:each party in a business transaction will receive something and give something in return.In terms,what is received is a debit and what bookkeeping is gi
8、ven is a credit.The T account is a representation of a scale or balance.”,GiveCREDIT,T account,Left SideReceiveDEBIT,Right SideGiveCREDIT,Accounting equation,Assets=Liabilities+Owners equityAssets-Liabilities=Owners equityNet assets=Owners equity,Rules of Double-Entry Accounting,1.Each transaction a
9、ffects at least two accounts.These accounts contains at least one account debitedand at least one account credited.2.Total debits must equal total credits.,T-account,T-account:a simplest form of an account,used to help illustrate the effect of transaction.,Account name,Debit(left side),Credit(right
10、side),Rules of debits&credits,The type of account determines the side in which increases and decreases are recorded.,Increases and Decreases in the Accounts,Income Statement Accounts,Record transactionsin the journal,Recording Phase,What is a journal?It is a record of each business transaction in a
11、chronological order krnldk()l，依时间前后排列而记载的.Steps of journalizing:Identify transaction from source documents.Specify accounts affected.Apply debit/credit rules.Record transaction with description.Verify that total debits equal total credits,Journal classification,General journal-to record all kinds of
12、 transactionsSpecial journal-to record a certain kind of transactions,Classification of Ledgers,Ledgers are created on the basis of the item of financial statements.General ledger accounts总分类帐帐户It contains all of the balance sheet and income statement accounts.Subsidiary ledger accounts明细分类帐A record
13、 created to record the individual items relating to a single general ledger account.,Post from the journalto the ledger,What is posting?Posting is the process that debits and credits are transferred from the journal to the ledger accounts.In the process,each amount in the debit column of the journal
14、 is posted by entering it on the debit side of an ledger account,and each amount in the credit column of the journal is posted by entering it on the credit side of an ledger account.,Dec.1Net Solutions paid a premium（primm，保险费）of$2,400 for a comprehensive insurance policy covering two years.,1 2 3 4
15、,Prepaid Insurance2 400 00,Cash2 400 00,ACCOUNT,Prepaid Insurance,ACCOUNT NO.15,Balance,Debit,Credit,Date,Debit,Credit,Item,Post.Ref.,2 400 00,2 400 00,Paid premium on two-yearpolicy.,1 2 3 4,Prepaid Insurance2 400 00,Cash2 400 00,ACCOUNT,Prepaid Insurance,ACCOUNT NO.15,Balance,Debit,Credit,Date,Deb
16、it,Credit,Item,Post.Ref.,2 400 00,2 400 00,2,15,Paid premium on two-yearpolicy.,ACCOUNT,Cash,ACCOUNT NO.11,Balance,Debit,Credit,Date,Debit,Credit,Item,Post.Ref.,2 000 00,5 900 00,2,Dec.1,2 400 00,3 500 00,ACCOUNT,Cash,ACCOUNT NO.11,Balance,Debit,Credit,Date,Debit,Credit,Item,Post.Ref.,2 000 00,5 900
17、 00,2,2 400 00,3 500 00,Dec.1,11,2,End-of-period Adjusting Entries,Why should adjusting entries be made?,Types of adjusting entries Accrued（krud，应计的）Revenues or Accrued AssetsAccrued Expenses or Accrued LiabilitiesUnearned Revenues or Deferred RevenuesPrepaid Expenses,1.Apportioning Recorded Costs摊销
18、已记录的成本,Assume that a business paid$3600 on Jan1 for one years rent in advance.Prepaid Rent 3600 Cash 3600At the end of Jan31,$300 had expired or been used up during the period.Rent Expense 300 Prepaid Rent 300,2.Apportioning Recorded Revenue摊销已记录的收入,Assume a monthly magazine publisher collected in a
19、dvance$4800 from customers for 6 months fees on July 1 Cash 4800 Unearned Subscription Revenue 4800 sbskrp()n n.捐献；订阅；订金；签署At the end of July31,1/6 of the publishers obligation is fulfilled after magazines are supplied to the subscribers.Unearned Subscription Revenue 800 Subscription Revenue 800,3.A
20、ccruing Unrecorded Expenses 应计未记录的费用,Suppose AJ CO.borrowed$100 000 on Dec 31,2004.The loan is for 1 year with interest at 9%.As of Jan 31,2005,AJ has had the benefit of loan for one month and it owes$750($100 000*9%/12)Interest Expense 750 Accrued Interest Payable 750,4.Accruing Unrecorded Revenue
21、应计未记录的收入,Suppose DR CO.has completed 2/3 of service work on May 31.The total amount to be received will be$6000 when the work is complete.Accounts Receivable 4000(6000*2/3)Accrued Service Revenue 4000,Do adjusting entries go directly to the relative ledger accounts?,Prepare a trial balance,Trial Bal
22、ance,What is a trial balance?A two-column schedule listing the names and balances of all the accounts in the order in which they appear in the general ledger,the debit balances are listed in the left-hand column and the credit balances in the right-hand column.The total of the two column should agre
23、e.Format of a trial balance,NetSolutionsTrial BalanceDecember 31,2005,Cash2 065 00Accounts Receivable2 220 00Supplies2 000 00Prepaid Insurance2 400 00Land20 000 00Office Equipment1 800 00Accounts Payable900 00Unearned Rent360 00Chris Clark,Capital25 000 00Chris Clark,Drawing4 000 00Fees Earned16 340
24、 00Wages Expense4 275 00Rent Expense1 600 00Utilities Expense985 00Supplies Expense800 00Miscellaneous Expense455 0042 600 0042 600 00,NetSolutionsTrial BalanceDecember 31,2005,Cash2 065 00Accounts Receivable2 220 00Supplies2 000 00Prepaid Insurance2 400 00Land20 000 00Office Equipment1 800 00Accoun
25、ts Payable900 00Unearned Rent360 00Chris Clark,Capital25 000 00Chris Clark,Drawing4 000 00Fees Earned16 340 00Wages Expense4 275 00Rent Expense1 600 00Utilities Expense985 00Supplies Expense800 00Miscellaneous Expense455 0042 600 0042 600 00,Balance Sheet Items,NetSolutionsTrial BalanceDecember 31,2
26、005,Cash2 065 00Accounts Receivable2 220 00Supplies2 000 00Prepaid Insurance2 400 00Land20 000 00Office Equipment1 800 00Accounts Payable900 00Unearned Rent360 00Chris Clark,Capital25 000 00Chris Clark,Drawing4 000 00Fees Earned16 340 00Wages Expense4 275 00Rent Expense1 600 00Utilities Expense985 0
27、0Supplies Expense800 00Miscellaneous Expense455 0042 600 0042 600 00,Statement of Owners Equity Item,NetSolutionsTrial BalanceDecember 31,2005,Cash2 065 00Accounts Receivable2 220 00Supplies2 000 00Prepaid Insurance2 400 00Land20 000 00Office Equipment1 800 00Accounts Payable900 00Unearned Rent360 0
28、0Chris Clark,Capital25 000 00Chris Clark,Drawing4 000 00Fees Earned16 340 00Wages Expense4 275 00Rent Expense1 600 00Utilities Expense985 00Supplies Expense800 00Miscellaneous Expense455 0042 600 0042 600 00,Income Statement Items,Can the trial balance reveal all errors?,Errors,1.Failure to record a
29、 transaction or to post a transaction.2.Recording the same erroneous rns adj.错误的；不正确的 amount for both the debit and the credit parts of a transaction.3.Recording the same transaction more than once.4.Posting a part of a transaction correctly as a debit or credit but to the wrong account.5.Posting in
30、 the wrong column.,Errors that will not cause the trial balance to be unequal:,Work Sheet 工作底稿,Work sheet includes unadjusted trial balance,adjusting entries,adjusted trial balance,and income statement and balance sheet(with a Dr.column and a Cr.column each).,4-48,表：十四栏式工作底稿,Closing Entries 结账分录,Cla
31、ssification of accountsBalance sheet accounts-Permanent(real)accountsIncome statement accounts-Temporary(nominal)accounts Close sth to sth=Transfer sth to sth 转移，转账The aim of making closing entries,Prepare financial statements,Income Statement,Statement of Cash Flows,Statement of Owners Equity,Begin
32、ning Balance Sheet,Ending Balance Sheet,Period of Time,Point inTime,Point inTime,Income Statement,Statement of Owners Equity,FASTFORWARD,Balance Sheet,Case for Discussion,In order for all accounts to look the same,and to simultaneously make sure that the accounting equation stays in balance with dou
33、ble-entry bookkeeping,the debit and credit system was devised（设计，发明）.Luca Pacioli first described it in 1494,and the basic system is so sound and efficient,we still use it today.Tradition aside,we would not still be using this ancient system if it did not work extremely well and efficiently.One coul
34、d set up a system with pluses and minuses,but it would not be as efficient at generating the data needed for financial statements while making sure that the accounting equation was still in balance.One is more likely to make mistakes in entering data with plus and minus signs,although this is a secondary concern to theissues of uniformity and efficiency.Why use debits and credits rather than pluses andminuses?,The End,
