Presentation is loading. Please wait.

Presentation is loading. Please wait.

 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 1 This is the prescribed.

Similar presentations


Presentation on theme: " 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 1 This is the prescribed."— Presentation transcript:

1  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 1 This is the prescribed textbook for your course. Available NOW at your campus bookstore!

2 1 Chapter  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 2 BALANCE DAY ADJUSTMENTS LEARNING OUTCOME:  TO REVISE GENERAL JOURNAL ENTRIES FOR BALANCE DAY ADJUSTMENTS

3  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 3 KEY TERMS  accrued expenses  accrued revenue  balance date  balance day adjustments  balance day entries  prepaid expenses  revenue in advance

4  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 4 THE ACCRUAL CONCEPT  Assumes that transactions are recorded in the period when revenue is earned and expenses are incurred NOT  When the cash is received and expenses are paid

5  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 5 TYPES OF BALANCE DAY ADJUSTMENTS 1.Accrued revenue 2.Accrued expenses 3.Revenue in advance 4.Prepaid expenses  Revenue earned but not yet received  Expenses incurred but not yet paid  Revenue received but not yet earned  Expenses paid but not yet incurred

6  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 6 TYPES OF BALANCE DAY ACCOUNTS 1.Asset account (DEBIT) 2.Liability account (CREDIT)  Accrued revenue  Prepaid expenses  Revenue in advance  Accrued expenses

7  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 7 EXAMPLE  Accrued revenue xCommission is due to be paid in July on a property sold in June

8  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 8 EXAMPLE  Prepaid expenses xInsurance expense account includes an amount of $3000 which relates to July, August and September in the next financial year

9  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 9 EXAMPLE  Accrued expenses xWages to be paid in July include $1000 for employees who worked on 29 June.

10  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 10 EXAMPLE  Revenue received in advance xFees received in June included a deposit of $2000 for a project starting in August

11  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 11 BALANCE DAY ADJUSTMENTS AFFECT STATEMENT OF FINANCIAL POSITION Prepaid expense DEBITASSET Accrued revenue DEBIT ASSET STATEMENT OF FINANCIAL Accrued expense CREDITLIABILITY POSITION AT JUNE 30 Revenue in advance CREDITLIABILITY

12  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 12 OTHER BALANCE DAY ENTRIES  Closing inventories  Bad and doubtful debts  Depreciation  Provision for annual leave  Provision for long service leave


Download ppt " 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson 1 This is the prescribed."

Similar presentations


Ads by Google