会计英语培训资料(英文版)(29页PPT).pptx

Unit Four Accounting Cycle (3)Adjustments Objectives:1 Explain how the matching concept relates to the 1 Explain how the matching concept relates to the accrual basis of accounting.accrual basis of accounting.2 Explain why adjustments are necessary and list 2 Explain why adjustments are necessary and list the characteristic of adjusting entries.the characteristic of adjusting entries.3 Journalize entries for accounts requiring 3 Journalize entries for accounts requiring adjustment.adjustment.4 Summarize the adjustment process and 4 Summarize the adjustment process and prepare an adjustment trial balance.prepare an adjustment trial balance.一一一一 accounting period accounting period cash basis(received or paid)cash basis(received or paid)accrual basis(earned or relate):accrual basis(earned or relate):revenue recognition concept revenue recognition concept matching principle matching principleGAAP require the use of the accrual basis,GAAP require the use of the accrual basis,small service businesses may use the cash small service businesses may use the cash basis because they have few receivables and basis because they have few receivables and payables.payables.The matching principle supports recording The matching principle supports recording revenues and relate expenses in the same revenues and relate expenses in the same period.period.二二二二 At the end of an accounting period,some At the end of an accounting period,some accounts in the ledger require updating.accounts in the ledger require updating.The journal entries that bring the accounts up to The journal entries that bring the accounts up to gate at the end of the accounting period are gate at the end of the accounting period are called called adjusting entriesadjusting entries.三三 Four typical adjusting entries:Deferrals-are created by recording a transaction in a way that delays or defers the recognition of an expense or a revenue.Deferred expenses(prepaid expenses)become expense over time(1)supplies(2)prepaid insurance(3)prepaid advertising(4)prepaid interest Deferred revenues(unearned revenue)become revenues over time(1)unearned rent(1)unearned rent(2)tuition(2)tuition(3)annual retailer fee(3)annual retailer fee(4)premium(4)premium(5)magazine subscriptions(5)magazine subscriptionsAccruals-are created by an Accruals-are created by an unrecorded expense that has been incurred unrecorded expense that has been incurred or an unrecorded revenue that has been or an unrecorded revenue that has been earned.earned.Accrued expenses(accrued liabilities)expense have been incurred but not recorded(1)accrued wages(2)accrued interest on notes payable(3)accrued taxes Accrued revenues(accrued assets)revenues earned but not recorded(1)fees for services(2)unbilled commissions(3)accrued interest on notes receivable(4)accrued rentSummarize:1 How do you tell the difference between 1 How do you tell the difference between deferrals and accruals?deferrals and accruals?If cash is received or paid in the current period,If cash is received or paid in the current period,but the revenue or expense relates to a future but the revenue or expense relates to a future period,the revenue or expense is a deferred item.period,the revenue or expense is a deferred item.If cash will not be received or paid until a future If cash will not be received or paid until a future period,but the revenue or expense relates to the period,but the revenue or expense relates to the current period,the revenue or expense is an current period,the revenue or expense is an accrued item.accrued item.Current accounting period Current accounting period(cash received or paid)(revenue or(cash received or paid)(revenue or expense incurred)expense incurred)future accounting periodfuture accounting period(revenue or expense incurred)(cash(revenue or expense incurred)(cash received or paid)received or paid)2 All adjusting entries affect at least one 2 All adjusting entries affect at least one income statement account and one balance income statement account and one balance sheet account.sheet account.四四 Examples:1 Assuming that on December 31 the amount of supplies on hand is$760,the amount to be transferred from the asset account to the expense account is$1240.(supplies used is the amount of adjustment)Dr.Supplies Expense$1240 Cr.Supplies$12402 The debit balance of$2400 in A prepaid insurance account represents a December 1 prepayment of insurance for 24 months.At the end of December the insurance for one month turn into reality.Dr.Insurance Expense$100 Cr.Prepaid Insurance$100Attention:(1)the balance of a prepaid(deferred)(1)the balance of a prepaid(deferred)expense is an asset that will become an expense is an asset that will become an expense in a future period.expense in a future period.(2)What is the effect of omitting adjusting(2)What is the effect of omitting adjusting entries?entries?On the income statement,Supplies Expense and On the income statement,Supplies Expense and Insurance Expense will be understated by a Insurance Expense will be understated by a total of$1340.total of$1340.On the balance sheet,Supplies and Prepaid On the balance sheet,Supplies and Prepaid Insurance will be overstated by a total of$1340.Insurance will be overstated by a total of$1340.(3)(3)Prepayments of expenses are sometimes made Prepayments of expenses are sometimes made at the beginning of the period in which they will be at the beginning of the period in which they will be entirely consumed.entirely consumed.3 According to As trial balance on December 3 According to As trial balance on December 31,the balance in the unearned rent account is 31,the balance in the unearned rent account is$360.This represents the receipt of three$360.This represents the receipt of three months rent on December 1 for Dec.Jan.Feb,months rent on December 1 for Dec.Jan.Feb,At the end of December$120 rent should be At the end of December$120 rent should be turn into reality.turn into reality.Dr.Unearned Rent$120 Cr.Rent Revenue$120In the case of wages expense,if the last day of a paid period is not the last day of the accounting period,the accrued wages expense and the related liability must be recorded in the accounts by an adjusting entry.4 At the end of December,accrued wages for A 4 At the end of December,accrued wages for A were$250.were$250.Dr.Wages Expense$250Dr.Wages Expense$250 Cr.Wages Payable$250 Cr.Wages Payable$250(1)wages are paid on the second and fourth(1)wages are paid on the second and fourth Fridays for the two-week period ending on Fridays for the two-week period ending on those Fridays.The payments were$950 on those Fridays.The payments were$950 on December 13 and$1200 on December 27.December 13 and$1200 on December 27.(2)The wages accrued for Monday and Tuesday,December 30 and 31,are$250.(3)Wages paid on Friday,January 10,totals$1275.SundSundayayMondMondayayTuesTuesdaydayWednWednesdayesdayFourtFourth dayh dayFridaFriday ySaturSaturdayday1 12 23 34 45 56 67 78 89 9101011111212131314141515161617171818191920202121222223232424252526262727282829293030313113-wages expense(paid)$95027-wages expense(paid)$120030,31-wages expense(accrued)$250Jan,10:Dr.Wages Payable$250 Cr.Cash$2505 Assume that A signed an agreement with B on December 15.The agreement provides that A will be on call to answer computer questions and render assistance to Bs employees.The services provided will be billed to B on the fifteenth of each month at a rate of$20 per hour.As of December 31,A had provided 25 hours of assistance to B.Dr.Accounts Receivable$500Dr.Accounts Receivable$500 Cr.Fees Earned$500 Cr.Fees Earned$5006 6 Fixed assetsFixed assets are a type of long-term deferred are a type of long-term deferred expense.The decreases in usefulness is called expense.The decreases in usefulness is called depreciation.All fixed asset,expect land,lose depreciation.All fixed asset,expect land,lose their usefulness.their usefulness.The estimated amount of depreciation for the The estimated amount of depreciation for the month is assumed to be$50 in Dec.of A.month is assumed to be$50 in Dec.of A.Dr.Depreciation Expense$50Dr.Depreciation Expense$50 Cr.Accumulated Depreciation Cr.Accumulated Depreciation _ office equipment$50 _ office equipment$50 (contra accountcontra account or or contra asset accountcontra asset account)The reminder value of office equipment$1750 is The reminder value of office equipment$1750 is called called the book value of the assetthe book value of the asset or or net book net book valuevalue.Result:depreciation allocates the cost of a Result:depreciation allocates the cost of a fixed asset to expense over its estimated life.fixed asset to expense over its estimated life.Question:1 If As adjustment for unearned rent had 1 If As adjustment for unearned rent had incorrectly been made for$180 instead of$120,incorrectly been made for$180 instead of$120,what would have been the effect on the financial what would have been the effect on the financial statements?statements?Revenue would have been overstated by$60;net Revenue would have been overstated by$60;net income would have been overstated by$60;liability income would have been overstated by$60;liability would have been understated by$60;and Owners would have been understated by$60;and Owners equity would have been overstated by$60.equity would have been overstated by$60.2 which of the accounts _ fees earned;misc.2 which of the accounts _ fees earned;misc.expenses;cash;wages expense;supplies;accounts expenses;cash;wages expense;supplies;accounts receivable;drawing;equipment;accumulated receivable;drawing;equipment;accumulated depreciation _ would normally require an depreciation _ would normally require an adjusting entry?adjusting entry?fees earned;fees earned;wages expense;wages expense;supplies;supplies;accounts receivable;accounts receivable;accumulated depreciationaccumulated depreciationSummary of basic adjustmentsTypes of Types of adjustmenadjustment t Adjusting entryAdjusting entry Effect of omitting Effect of omitting it on BS and on it on BS and on ISIS Deferred Deferred expenseexpense Dr.ExpenseDr.Expense Cr.Assets Cr.Assets Expense Expense understated and understated and net income net income overstatedoverstatedAssets Assets overstated and overstated and owners equity owners equity overstatedoverstated DeferreDeferred d revenuerevenue Dr.LiabilityDr.Liability Cr.Cr.RevenueRevenue Liabilities overstated Liabilities overstated and owners equity and owners equity understatedunderstatedRevenues understated Revenues understated and net income and net income understatedunderstated Accrued Accrued expenseexpense Dr.Expense Dr.Expense Cr.Liability Cr.Liability Expense understated Expense understated and net income and net income overstatedoverstatedLiabilities understated Liabilities understated and owners equity and owners equity overstatedoverstated AccruAccrued ed revenrevenueue Dr.AssetsDr.Assets Cr.Cr.RevenueRevenue Assets understated and Assets understated and owners equity owners equity understated understated Revenues understated Revenues understated and net income and net income understatedunderstated Fixed Fixed AssetsAssets Dr.Expense Dr.Expense Cr.Contra Cr.Contra AssetAsset Expense understated Expense understated and net income and net income overstatedoverstatedAssets overstated and Assets overstated and owners equity owners equity overstatedoverstated 1、每一个成功者都有一个开始。勇于开始，才能找到成功的路。11月-2211月-22Monday,November 7,20222、成功源于不懈的努力，人生最大的敌人是自己怯懦。20:11:1020:11:1020:1111/7/2022 8:11:10 PM3、每天只看目标，别老想障碍。11月-2220:11:1020:11Nov-2207-Nov-224、宁愿辛苦一阵子，不要辛苦一辈子。20:11:1020:11:1020:11Monday,November 7,20225、积极向上的心态，是成功者的最基本要素。11月-2211月-2220:11:1020:11:10November 7,20226、生活总会给你另一个机会，这个机会叫明天。07 十一月 20228:11:10 下午20:11:1011月-227、人生就像骑单车，想保持平衡就得往前走。十一月 228:11 下午11月-2220:11November 7,20228、业余生活要有意义，不要越轨。2022/11/7 20:11:1020:11:1007 November 20229、我们必须在失败中寻找胜利，在绝望中寻求希望。8:11:10 下午8:11 下午20:11:1011月-2210、一个人的梦想也许不值钱，但一个人的努力很值钱。11/7/2022 8:11:10 PM20:11:1007-11月-2211、在真实的生命里，每桩伟业都由信心开始，并由信心跨出第一步。11/7/2022 8:11 PM11/7/2022 8:11 PM11月-2211月-22谢谢大家谢谢大家