Chapter 3 Completing the Accounting Cycle
Chapter 3Mugan-Akman Accounting Cycle Analyze and record the transactions Post the transactions and prepare trial balance Adjust the accounts and prepare trial balance Close the accounts and prepare trial balance Prepare the financial statements
Chapter 3Mugan-Akman Matching Principle All revenues must be recorded in the accounting period in which the goods are sold or services are rendered and all expenses must be recorded in the accounting period in which they are incurred to produce such revenues
Chapter 3Mugan-Akman Allocation of costs between accounting periods 3.Expenses incurred but not recorded 2.Allocation of unearned revenues between accounting periods 4.Revenues earned but not recorded Adjusting Entries
Chapter 3Mugan-Akman Adjustment – Prepaid Rent Adjustment - Office Supplies
Chapter 3Mugan-Akman Adjustment - Depreciation of Property Plant & Equipment
Chapter 3Mugan-Akman Express Travel Agency Partial Balance Sheet 31January 2004 In TL Plant and Equipment Office Equipment and Furniture Less: Accumulated Depreciation (250) Plant and Equipment, net14.750
Chapter 3Mugan-Akman Allocation of costs between accounting periods 3.Expenses incurred but not recorded 2.Allocation of unearned revenues between accounting periods 4.Revenues earned but not recorded Adjusting Entries
Chapter 3Mugan-Akman Adjustment - Unearned Revenues
Chapter 3Mugan-Akman Allocation of costs between accounting periods 3.Expenses incurred but not recorded 2.Allocation of unearned revenues between accounting periods 4.Revenues earned but not recorded Adjusting Entries
Chapter 3Mugan-Akman Adjustment - Accrued Salary Expense Adjustment (7) Accrued Interest Expense
Chapter 3Mugan-Akman Allocation of costs between accounting periods 3.Expenses incurred but not recorded 2.Allocation of unearned revenues between accounting periods 4.Revenues earned but not recorded Adjusting Entries
Chapter 3Mugan-Akman Adjustment Accrued Revenues
Chapter 3Mugan-Akman Consulting services performed but not yet billed to the clients, TL Earned one month portion of advance received on 22 October. The count of supplies as of 31 October identified TL 40 of supplies on hand. Monthly depreciation should be recorded for the computer and furniture and fixtures. Salary of the student accrued but was not paid.
Chapter 3Mugan-Akman Yagmur Bulut Consulting services performed but not yet billed to the clients, TL Earned one month portion of advance received on 22 October. The count of supplies as of 31 October identified TL 40 of supplies on hand. Monthly depreciation should be recorded for the computer and furniture and fixtures. Salary of the student accrued but was not paid.
Chapter 3Mugan-Akman
Chapter 3Mugan-Akman
Chapter 3Mugan-Akman Accounting Cycle Analyze and record the transactions Post the transactions and prepare trial balance Adjust the accounts and prepare trial balance Close the accounts and prepare trial balance Prepare the financial statements
Chapter 3Mugan-Akman Steps to Close Accounts Close temporary accounts with credit balances to period income (income summary) Close temporary accounts with debit balances to period income (income summary) Close Period income (income summary) Close dividends (owners’ withdrawals)
Chapter 3Mugan-Akman
Chapter 3Mugan-Akman Closing Credit Balances
Chapter 3Mugan-Akman Closing Debit Balances
Chapter 3Mugan-Akman Closing Period Income Loss
Chapter 3Mugan-Akman
Chapter 3Mugan-Akman Accounting Cycle Analyze and record the transactions Post the transactions and prepare trial balance Adjust the accounts and prepare trial balance Close the accounts and prepare trial balance Prepare the financial statements
Chapter 3Mugan-Akman
Chapter 3Mugan-Akman
Chapter 3Mugan-Akman
Chapter 3Mugan-Akman
Chapter 3Mugan-Akman
Chapter 3Mugan-Akman