1. Chapter 3  Completing the Accounting Cycle

2. Chapter 3Mugan-Akman 20072 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

3. Chapter 3Mugan-Akman 20073 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

4. Chapter 3Mugan-Akman 20074 1.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

5. Chapter 3Mugan-Akman 20075 Adjustment – Prepaid Rent Adjustment - Office Supplies

6. Chapter 3Mugan-Akman 20076 Adjustment - Depreciation of Property Plant & Equipment

7. Chapter 3Mugan-Akman 20077 Express Travel Agency Partial Balance Sheet 31January 2004 In TL Plant and Equipment Office Equipment and Furniture 15.000 Less: Accumulated Depreciation (250) Plant and Equipment, net14.750

8. Chapter 3Mugan-Akman 20078 1.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

9. Chapter 3Mugan-Akman 20079 Adjustment - Unearned Revenues

10. Chapter 3Mugan-Akman 200710 1.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

11. Chapter 3Mugan-Akman 200711 Adjustment - Accrued Salary Expense Adjustment (7) Accrued Interest Expense

12. Chapter 3Mugan-Akman 200712 1.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

13. Chapter 3Mugan-Akman 200713 Adjustment Accrued Revenues

14. Chapter 3Mugan-Akman 200714 Consulting services performed but not yet billed to the clients, TL 3.800 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.

15. Chapter 3Mugan-Akman 200715 Yagmur Bulut Consulting services performed but not yet billed to the clients, TL 3.800 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.

16. Chapter 3Mugan-Akman 200716

17. Chapter 3Mugan-Akman 200717

18. Chapter 3Mugan-Akman 200718 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

19. Chapter 3Mugan-Akman 200719 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)

20. Chapter 3Mugan-Akman 200720

21. Chapter 3Mugan-Akman 200721 Closing Credit Balances

22. Chapter 3Mugan-Akman 200722 Closing Debit Balances

23. Chapter 3Mugan-Akman 200723 Closing Period Income Loss

24. Chapter 3Mugan-Akman 200724

25. Chapter 3Mugan-Akman 200725 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

26. Chapter 3Mugan-Akman 200726

27. Chapter 3Mugan-Akman 200727

28. Chapter 3Mugan-Akman 200728

29. Chapter 3Mugan-Akman 200729

30. Chapter 3Mugan-Akman 200730

31. Chapter 3Mugan-Akman 200731