1. Principles of Accounting I
Asst.Prof.Dr. Panchat Akarak
School of Accounting
Chiang Rai Rajabhat University
Principles of Accounting I

2. Accounting Cycle 1 Adjusting Journal Entries
Posted Entries to Ledger Accounts
Prepare Unadjusted Trial Balance
Adjusting Journal Entries
Prepare Adjusted Trial Balance 1
Recorded Journal Entries
Prepare Financial Statement
Recorded Reversing Entries/
Opening Entries
Prepare Post. Closing Trial Balance
Recorded Closing Entries
Principles of Accounting I

3. Principles of Accounting I
Step of bookkeeping
Step 1 Recorded 1. General Journal Step 2 Posted 2. Ledger/ GL Step 3 Balance Accounts 3. Trial Balance Step 4 Recorded Adjusted 4. General Journal Step 5 Prepare worksheet 5. Working Paper Step 6 Prepare F/S 6. Financial Statement Step 7 Prepare Closing 7. General Journal Step 8 Recorded Opening/ 8. General Journal Reversing entries
Principles of Accounting I

4. Principles of Accounting I
Working Paper
Work sheet such as:
6 columns
8 columns
10 columns
12 columns
Principles of Accounting I

5. Principles of Accounting I
Trial Balance
Account Titles
Ac No.
DEBIT
CREDIT
Cash 11
41,000
Accounts receivable 12
3,000
Supplies on hand 13
2,000
Unexpired insurance 14
5,000
Land 15
70,000
Building 16
300,000
Accumulated depreciation-building 17
30,000
Equipment 18
Accumulated depreciation-Equipment 19
6,000
Accounts payable 21
Capital-Brown 31
Drawing-Brown 32
Commissions revenue 41
158,000
Payroll expense 51
25,000
Depreciation building expense 52
15,000
Depreciation equipment expense 53
Utilities expense 54
1,000
Total
500,000
Principles of Accounting I

6. Financial Position Statement
Work sheet 6 columns
Accounts Titles
AC. No
Trial Balance
Income Statement
Financial Position Statement
Dr.
Cr.
Principles of Accounting I

7. Principles of Accounting I
Work sheet 8 columns
A/C Name
AC no
Trial Balance
Adjusted
Income statement
Financial
Position Statement
Dr.
Cr.
Principles of Accounting I

8. Financial Position Statement
Working paper 10 Columns
Accounts Titles
AC. No
Unadjusted
Trial Balance
Adjusted
Income Statement
Financial Position Statement
Dr.
Cr.
Principles of Accounting I

9. Financial Position Statement
Accounts Titles
AC. No
Trial Balance
Income Statement
Financial Position Statement
Cash
101
70,000
Short-term securities
102
30,000
Accounts receivable
103
60,000
Allowance for doubtful account
103.1
3,000
Note receivable
104
20,000
Office supplies inventory
105
5,000
Prepaid insurance
106
12,000
Accrued interest receivable
107
6,000
Merchandise inventory Dec.31
108
4,000
Land
109
200,000
Building
110
400,000
Depreciation accumulated-building
110.1
100,000
Equipment
111
180,000
Depreciation accumulated-equipment
111.1
36,000
Patent
112
Goodwill
113
Principles of Accounting I

10. Financial Position Statement
Accounts Titles
AC. No
Trial Balance
Income Statement
Financial Position Statement
Accounts payable
201
21,000
Note payable
202
30,000
Bonds payable
203
200,000
Bonds discount
203.1
5,000
Common stock par 10
301
300,000
Premium on common stock
302
10,000
Retained earnings
303
Reserve for estimated damages
304
20,000
Sales revenues
401
850,000
Sales return
401.1
Discount for sale
401.2
3,000
Cost of goods sold
501
450,000
Selling expenses
502
Administrative expense
503
70,000
total
1,600,000
Principles of Accounting I

11. Financial Position Statement
Accounts Titles
AC. No
Trial Balance
Income Statement
Financial Position Statement
Cash
101
70,000
Short-term securities
102
30,000
Accounts receivable
103
60,000
Allowance for doubtful account
103.1
3,000
Note receivable
104
20,000
Office supplies inventory
105
5,000
Prepaid insurance
106
12,000
Accrued interest receivable
107
6,000
Merchandise inventory Dec.31
108
4,000
Land
109
200,000
Building
110
400,000
Depreciation accumulated-building
110.1
100,000
Equipment
111
180,000
Depreciation accumulated-equipment
111.1
36,000
Patent
112
Goodwill
113
Principles of Accounting I

12. Financial Position Statement
Accounts Titles
AC. No
Trial Balance
Income Statement
Financial Position Statement
Accounts payable
201
21,000
Note payable
202
30,000
Bonds payable
203
200,000
Bonds discount
203.1
5,000
Common stock par 10
301
300,000
Premium on common stock
302
10,000
Retained earnings
303
Reserve for estimated damages
304
20,000
Sales revenues
401
850,000
Sales return
401.1
Discount for sale
401.2
3,000
Cost of goods sold
501
450,000
Selling expenses
502
Administrative expense
503
70,000
total
1,600,000
558,000 
1,042,000 
750,000 
 Net Income
 292,000
292,000 
1,042,000
Principles of Accounting I

13. Financial Position Statement
Working paper 6 Column
Accounts Titles
AC. No
Trial Balance
Income Statement
Financial Position Statement
Cash 11
41,000
Accounts receivable 12
3,000
Supplies on hand 13
2,000
Unexpired insurance 14
5,000
Land 15
70,000
Building 16
300,000
Accumulated depreciation-building 17
30,000
Equipment 18
Accumulated depreciation-Equipment 19
6,000
Accounts payable 21
Capital-Brown 31
Drawing-Brown 32
Commissions revenue 41
158,000
Payroll expense 51
25,000
Depreciation building expense 52
15,000
Depreciation equipment expense 53
Utilities expense 54
1,000
 total
500,000
44,000
456,000
342,000
Net Income
114,000
Principles of Accounting I

14. Principles of Accounting I
Financial Statement
Income Statement:-
-Revenues
-Expenses
-Profit/Loss
Principles of Accounting I

15. Principles of Accounting I
Income Statement
Account Form
Baht
Expenses
Revenues
Cost of Service xx
Revenues from Service
Salaries
Other revenues
Rent expense
Advertising Expenses
Depreciation Expense
Utilities Expenses
Bad debt
Net Profit
Total
Principles of Accounting I

16. Principles of Accounting I
Income Statement
Company Name
Income statement
For ………, Ended ……………….
Report Form
Baht
Revenue.-
Commission Revenue xx
other Revenue
total
Expense.-
Payroll exp.
Depreciation building exp.
Depreciation Equipment exp.
Utilities exp.
Net Income
Principles of Accounting I

17. Principles of Accounting I
Financial Statement
Financial Position Statement
-Assets
-Liabilities
-Owner’s Equity
Principles of Accounting I

18. Financial Position Statement
Assets
Current Assets
Non current Assets
Liabilities
Current Liabilities
Non current Liabilities
Principles of Accounting I

19. The classified Financial Position Statement
Current Assets such as;
-Cash and Cash Equivalent
-Accounts Receivable,
-Note Receivable,
-Prepaid Expenses
-Accrued Revenue
-Supplies on hand
Principles of Accounting I

20. The classified Financial Position Statement
Noncurrent Assets such as;
-Long term Investment
-Land
-Buildings
-Machinery
-Equipment
-Accumulated Depreciation
Principles of Accounting I

21. The classified Financial Position Statement
Current Liabilities such as;
-Bank Overdraft
-Accounts Payable,
-Note Payable,
-Accrued Expenses
-Deferred Revenue
-Shot term loan
-Short term other liabilities
Principles of Accounting I

22. The classified Financial Position Statement
Noncurrent Liabilities such as;
-Long term Loan
-Note Payable-long term
-Bond
Principles of Accounting I

23. Financial Position Statement
Owners’ equity as;
1) Proprietorship
-Capital
-Drawing
-Net Income
Principles of Accounting I

24. Financial Position Statement
Owners’ equity
2) Partnership
-Capital-A
-Capital-B
-Retained Earning
Principles of Accounting I

25. Financial Position Statement
Owners’ equity
3) Corporation
-Capital share
-Surplus-Capital
-Surplus-other
-Retained Earning
Principles of Accounting I

26. Financial Position Statement
Account Form
Assets
Liabilities& Equity
Current Assets:
Current Liabilities:
Cash Xx
Bank overdraft xx
Accounts Receivable
Accounts Payable
Note Receivable
Note Payable
Supplies
other Liabilities
Noncurrent Assets:
Noncurrent Liabilities:
Land
Loan
Building-net
Owners Equity:
Equipment-net
Capital-Satit
Total Assets
Total Liabilities &Equity
Principles of Accounting I

27. Financial Position Statement Liabilities and Owner’s Equity
Company Name
Financial Position Statement
Report Form
Baht
Assets
Current Assets:
Cash xx
Accounts Receivable
Supplies
Unexpired Insurance
Noncurrent Assets:
Land
Building
 xx
Accumulated depreciation-building
Equipment
Accumulated depreciation-Equipment
Total Assets
xxx
Liabilities and Owner’s Equity
Current Liabilities:
Accounts Payable
Owner’s Equity
Capital
xx 
Drawing
Net Income
Total Liabilities and Owner’s Equity
Principles of Accounting I

28. Income Statement Account Form The Dark Company Income statement
For year, Ended December 31, 2016
Baht
Expenses
Income or Revenue
Payroll exp.
25,000
Commission Revenue
158,000
Depreciation building exp.
15,000
Depreciation Equipment exp.
3,000
Utilities exp.
1,000
44,000
Net Income
114,000
Principles of Accounting I

29. Income Statement Report Form The Dark Company Income statement
For year, Ended December 31, 2016
Baht
Revenue.-
Commission Revenue
158,000
Expense.-
Payroll exp.
25,000
Depreciation building exp.
15,000
Depreciation Equipment exp.
3,000
Utilities exp.
1,000
44,000
Net Income
114,000
Principles of Accounting I

30. Financial Position Statement
The Dark Company
Financial Position Statement
December 31, 2016
Account Form
Baht
Assets
Liabilities and Owner’s Equity
Current Assets:
Current Liabilities:
Cash
41,000
Accounts Payable
6,000
Accounts Receivable
3,000
Owner’s Equity
Supplies
2,000
Capital ,000
Unexpired insurance
5,000
Drawing (5,000)
Noncurrent Assets:
295,000
Land
70,000
Net Income ,000
409,000
Building ,000
Accumulated depreciation-
building (30,000)
270,000
Equipment ,000
Equipment (6,000)
24,000
Total
415,000
Principles of Accounting I

31. Financial Position Statement Liabilities and Owner’s Equity
The Dark Company
Financial Position Statement
December 31, 2016
Report Form
Baht
Assets
Current Assets:
Cash
41,000
Accounts Receivable
3,000
Supplies
2,000
Unexpired Insurance
5,000
Noncurrent Assets:
Land
70,000
Building ,000
Accumulated depreciation-building (30,000)
270,000
Equipment ,000
Accumulated depreciation-Equipment (6,000)
24,000
Total Assets
415,000
Liabilities and Owner’s Equity
Current Liabilities:
Accounts Payable
6,000
Owner’s Equity
Capital ,000
Drawing (5,000)
Net Income ,000
409,000
Total Liabilities and Owner’s Equity
Principles of Accounting I

32. The Accounting Cycle Summarized
Journalizing Adjusting Entries the Closing Process
1) Closing the Revenue Account(s)
2) Closing the Expense Account(s)
3) Closing the Profit and Loss Summary Account
4) Closing the Owner’s Drawing Account
5) Closing Process Summarized
6) Post-Closing Trial Balance
Principles of Accounting I

33. Principles of Accounting I
Closing entries
1) Dec. 31 Dr. Service Revenue xx Other Revenue xx Cr. Profit and Loss Summary Account xx (Income Summary) To close revenue accounts
Principles of Accounting I

34. Principles of Accounting I
Closing entries
2) Dec. 31 Dr. Profit and Loss Summary Account xx (Income Summary) Cr. Payroll Expense xx Utilities Expense xx Supplies Expense xx Insurance Expense xx Depreciation Expense-Building xx Depreciation expense-Equipment xx To close expense accounts
Principles of Accounting I

35. Principles of Accounting I
Closing entries 3)
Dec. 31 (Profit or net income)
Dr. Profit and Loss Summary Account xx
(Income Summary)
Cr. Capital-John xx
To close net income to capital
Principles of Accounting I

36. Principles of Accounting I
Closing entries 3)
Dec (Loss or net income)
Dr. Capital-John/Retained Earning xx
Cr. Profit and Loss Summary Account xx
(Income Summary)
To close net income to capital
Principles of Accounting I

37. Principles of Accounting I
Closing entries 4)
Dec. 31
Dr. Capital- John xx
Cr. Drawing -John xx
To close the owner’s drawing account
Principles of Accounting I

38. Recorded Journal Entries
General Journal P.…1… 1
Date
Account Titles and Explanation
P.R.
Debit
amount
Credit
25x5
Dec 31
Commission Revenues
158,000 -
Income summary
To close revenue accounts
Principles of Accounting I

39. Recorded Journal Entries
General Journal P.…1… 2
Date
Account Titles and Explanation
P.R.
Debit
amount
Credit
25x5
Dec 31
Income summary
44,000 -
Payroll exp.
25,000
Depreciation-Building
15,000
Depreciation-Equipment
3,000
Utilities exp.
1,000
To close expense accounts
Principles of Accounting I

40. Recorded Journal Entries
General Journal P.…1… 3
Date
Account Titles and Explanation
P.R.
Debit
amount
Credit
25x5
Dec 31
Income summary
114,000 -
Capital-Brown
To close net income to capital
Principles of Accounting I

41. Recorded Journal Entries
General Journal P.…1… 4
Date
Account Titles and Explanation
P.R.
Debit
amount
Credit
25x5
Dec
31 
Capital-Brown
5,000 -
Drawing-Brown
To close the owner’s drawing account
Principles of Accounting I

42. Recorded Journal Entries
General Journal P.…1…
1+2
Date
Account Titles and Explanation
P.R.
Debit
amount
Credit
25x5
Dec 31
Commission Revenues
158,000 -
Income summary
114,000
Payroll exp.
25,000
Depreciation-Building
15,000
Depreciation-Equipment
3,000
Utilities exp.
1,000
To close revenues, and expense accounts to income summary
Principles of Accounting I

43. General Ledger-T Account
A/C... Commissions revenue No
Date
Transaction
page
Debit
amount
Credit amount
 Dec.31
Income Summary
 GL10
158,000 -
 Dec-
 Cash
GJ.1 
158,000  - 
Principles of Accounting I

44. General Ledger-T Account
A/C. Payroll expense No
Date
Transaction
page
Debit
amount
Credit amount
 Dec 31
Cash
 GL1
25,000 -
Dec 31
 Income Sum
GJ10 
 25,000 - 
Principles of Accounting I

45. General Ledger-T Account
A/C…Depreciation building expense No
Date
Transaction
page
Debit
amount
Credit amount
Dec 31
Accumulated-- 
GJ10 
15,000 -
Income Sum.
15,000  - 
Principles of Accounting I

46. General Ledger-T Account
A/C. Depreciation equipment expense No
Date
Transaction
page
Debit
amount
Credit amount
Dec 31
Accumulated-- 
GJ10 
3,000 -
Income Sum.
3,000  - 
Principles of Accounting I

47. General Ledger-T Account
A/C.. Utilities expense No
Date
Transaction
page
Debit
amount
Credit amount
Dec 31
Cash
GJ10 
1,000 -
Income Sum.
1,000  - 
Principles of Accounting I

48. General Ledger-T Account
A/C.. Income Summary No..33
Date
Transaction
page
Debit
Amount
Credit amount
 Dec 31
Payroll exp. 
GJ10 
25,000 -
Dec 31
Commission-R
GJ10
158,000  - 
Depreciation-B
15,000
Depreciation-E
 3,000
Utilities exp.
 1,000
Capital-Brown
114,000
158,000
 158,000
Principles of Accounting I

49. General Ledger-T Account
A/C.. Drawing-Brown No
Date
Transaction
page
Debit
amount
Credit amount
Dec 31
Cash 
GJ10 
5,000   -
Capital Brown - 
Principles of Accounting I

50. General Ledger-T Account
A/C. Capital-Brown No..31..
Date
Transaction
page
Debit
amount
Credit amount
 Dec 31
Drawing 
GJ10 
5,000  - 
Dec 1
Balance 
GJ1 
 300,000
Balance
409,000 -
  31
Net Income 
114,000
414,000
 414,000
 Jan 1
 409,000
Principles of Accounting I

51. Post-Closing Trial Balance
A post-closing trial balance is taken after revenue, expense, and drawing accounts have been closed.
Only asset, liability, and owner’s capital accounts appear on the post-closing trial balance.
The post-closing trial balance serves as the start of the new accounting period.
Principles of Accounting I

52. Principles of Accounting I
Reversing Entries
Reversing entries reverse the effects of the adjusting entries
Such as
-Accrued Expense (Liabilities)
-Accrued Revenues (Assets)
-Prepaid Expense (Assets)
(If recorded Expense)
-Deferred Revenues (Liabilities)
(If recorded Revenues)
Principles of Accounting I

53. Principles of Accounting I
Reversing Entries
Accrued Expense (Liabilities)
Adjusted (Dec. 31)
Dr. Expense
Cr. Accrued Expense
Reversing (Jan 1)
Dr. Accrued expense
Cr. Expense
Principles of Accounting I

54. Principles of Accounting I
Reversing Entries
Accrued Expense (Liabilities)
Cash Payment in Feb. 1= 1,000
(Dec=500 and Jan=500)
Feb 1 Dr. Expense 1,000
Cr. Cash ,000
To recorded payment
Principles of Accounting I

55. General Ledger-T Account
A/C.. Accrued Expense No
Date
Transaction
page
Debit
amount
Credit amount
 Jan 1
Reversing 
 GJ 1
500 - 
 Jan1
Balance 
500 
Principles of Accounting I

56. General Ledger-T Account
A/C.. ….Expense No
Date
Transaction
page
Debit
amount
Credit amount
Feb 1
Cash
GJ 1 
1,000  - 
 Jan1
Reversing 
500 
Principles of Accounting I

57. Principles of Accounting I
Reversing Entries
Accrued Revenues (Assets)
Adjusted (Dec. 31)
Dr. Accrued Revenues 1,000
Cr. Revenues 1,000
Reversing (Jan 1)
Dr. Revenues 1,000
Cr. Accrued Revenues 1,000
Principles of Accounting I

58. Principles of Accounting I
Reversing Entries
Accrued Revenues (Assets)
Cash Receivable in Feb 1=1,500
(Dec =1,000 and Jan = 500)
Feb 1 Dr. Cash 1,500
Cr. Revenue 1,500
To recorded Revenue
Principles of Accounting I

59. General Ledger-T Account
A/C.. Accrued Revenue No
Date
Transaction
page
Debit
amount
Credit amount
 Jan 1
Balance
1,000 - 
 Jan1
Reversing
GJ 1
1,000 
Principles of Accounting I

60. General Ledger-T Account
A/C.. ….Revenue No
Date
Transaction
page
Debit
amount
Credit amount
Jan 1
Reversing
GJ 1 
1,000  - 
 Feb1
Cash
1,500 
Principles of Accounting I

61. Principles of Accounting I
Reversing Entries
Prepaid Expense (Assets)
(Recorded Expense Only)
Adjusted (Dec. 31)
Dr. Prepaid Expense 500
Cr. Expense 500
Reversing (Jan 1)
Dr. Expense 500
Cr. Prepaid Expense 500
Principles of Accounting I

62. General Ledger-T Account
A/C.. Prepaid Expense No
Date
Transaction
page
Debit
amount
Credit amount
 Jan 1
Balance
500 - 
 Jan1
Reversing
GJ 1 
500 
Principles of Accounting I

63. General Ledger-T Account
A/C.. ….Expense No
Date
Transaction
page
Debit
amount
Credit amount
Jan 1
Reversing
GJ 1 
500  - 
Principles of Accounting I

64. Principles of Accounting I
Reversing Entries
Deferred Revenues (Liabilities)
(Recorded Revenues Only)
Adjusted (Dec. 31)
Dr. Revenues 800
Cr. Deferred Revenues 800
Reversing (Jan 1)
Dr. Deferred Revenues 800
Cr. Revenues 800
Principles of Accounting I

65. General Ledger-T Account
A/C.. Deferred Revenue No
Date
Transaction
page
Debit
amount
Credit amount
 Jan 1
Reversing 
 GJ 1
800 - 
 Jan1
Balance 
800 
Principles of Accounting I

66. General Ledger-T Account
A/C.. ….Revenue No
Date
Transaction
page
Debit
amount
Credit amount
 Jan1
Reversing 
GJ 1 
800  - 
Principles of Accounting I

67. Principles of Accounting I
Opening Entries
Jan. 1 Dr. Assets-Accounts name xx Cr. Liabilities- Accounts name xx Owner’s Equity xx To recorded opening entries
Principles of Accounting I

68. Principles of Accounting I
Opening Entries
Jan. 1 Dr. Cash 41,000 Accounts Receivable 3,000 Supplies 2,000 Unexpired Insurance 5,000 Land 70,000 Building 300,000 Equipment 30,000 Cr. Accumulated depreciation-building 30,000 Accumulated depreciation-Equipment 6,000 Accounts Payable 6,000 Capital-Brown 409,000 To recorded opening entries
Principles of Accounting I

69. The End
Thank you for your Attention Q & A
Principles of Accounting I