1. Slide 2-1 BMGT 220, Discussion #3 – Chapter 2 Kristian Sooklal kristiansooklal@yahoo.com 443-797-4588 (cell) | 410-575-4719 (text)

2. Slide 2-2 Important News Wizards vs. Nets (home game) tonight at 7 Wizards vs. Nets (home game) tonight at 7 Request tickets to Clemson basketball game today Request tickets to Clemson basketball game today Virginia game on Sunday at 1:00 pm Virginia game on Sunday at 1:00 pm Wizards beat the Knicks, 106-96 Wizards beat the Knicks, 106-96

3. Slide 2-3 Topics in Chapter 2 Double Entry system Double Entry system Debits and Credits Debits and Credits DEAD DEAD COLR COLR Normal Balances Normal Balances Beginning Balance  Additions and Subtractions  Ending Balance Beginning Balance  Additions and Subtractions  Ending Balance T Accounts T Accounts Posting Posting Trial Balances Trial Balances

4. Slide 2-4 Plan for today Quiz 1 back Quiz 1 back Financial Statements Financial Statements Knowledge Check Questions Knowledge Check Questions Review of class notes + homework Review of class notes + homework Any questions? Any questions? Quiz 2 Quiz 2

5. Slide 2-5 After processing its remaining transactions for December, Scott company prepares a Trial Balance. DebitsCredits Cash3,950$ Accounts receivable- 1,500 Supplies9,650 Prepaid Insurance2,400 Equipment23,500 Accounts payable6,200$ Unearned consulting revenue3,000 Common stock30,000 Dividends600 Consulting revenue5,800 Rental revenue300 Salaries expense1,400 Rent expense 2,000 Utilities expense300 Total 45,300$ Scott Company Trial Balance December 31, 2011 The trial balance lists all account balances in the general ledger. If the books are in balance, the total debits will equal the total credits. $ 45,300

6. Slide 2-6 Stmt. Of Cash Flows Income Statement Stmt. of Ret. Earnings Beginning Balance Sheet Ending Balance Sheet Using a Trial Balance to prepare Financial Statements

7. Slide 2-7 Use the Trial Balance for Scott company to prepare its financial statements

8. Slide 2-8 Income Statement

9. Slide 2-9 Statement of Retained Earnings

10. Slide 2-10 Balance Sheet

11. Slide 2-11 Knowledge Check # 5: Knowledge Check # 5: An accountant for O’Leary Company enters a transaction in which she debits Accounts Receivable and credits Service Revenue. What type of transaction occurred that results in this entry? 1. 1. O’Leary collected an Account Receivable. 2. 2. O’Leary performed a service in exchange for cash. 3. 3. O’Leary performed a service for a client and sent a bill for services rendered 4. 4. O’Leary wrote off an Account Receivable that it expects not to collect.

12. Slide 2-12 Knowledge Check # 6: Knowledge Check # 6: If assets and equity have both been reduced by equal amounts in the same journal entry, what is the most likely explanation? 1. 1. A fixed asset has been purchased on credit. 2. 2. An invoice has been received from the cell phone company. 3. 3. A supplier has been paid. 4. 4. An owner has received a dividend.