Chapter-4-Accounts.ppt

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1、4-1AccountsCHAPTER 4CHAPTER 44-2Learning objectivesl1.Have a general idea of the three-digit system.l2.Grasp the typical accounts.l3.Be able to classify the accounts.4-3AccountsAllthebusinesstransactionsshouldbesortedoutandclassified.Torecordthetransactionsintheaccountscanmakefinancialstatementsando

2、therreportspreparedquicklyandeasily.4-4Anaccountisthebasicstorageunitforaccountingdata.AccountsAnaccountingsystemhasseparateaccountsforeachasset,eachliability,andeachcomponentofownersequity,includingrevenuesandexpenses.4-5AccountsDifferenttypesofbusinesseswillhavedifferentaccounts.Manufacturingbusin

3、ess AccountsforitsvariousmanufacturingcoststoreportthecostofgoodssoldAretailer Accountsforthepurchaseofitsstockmerchandise 4-6AccountsTobeabletofindanaccountintheledgereasilyandtoidentifyaccounts,anaccountantoftennumbersthem.Inmostcases,athree-digitsystemisusedinabusiness.4-7Inathree-digitsystem,the

4、firstdigitreferstothemajorfinancialstatementclassifications.Accounts1Assets2Liability3Owners equity4Revenues5Expenses4-8AccountsNow,letslookatanexampleofStevsBarberShop4-9AssetsCash(atBank)NotesReceivableAccountsReceivableHaircuttingFeesReceivableHaircuttingSuppliesOfficeSuppliesPrepaidRentPrepaidIn

5、suranceLandBuildingAccumulateddepreciation,BuildingPhotocopyEquipment111112113114115116117118141142143144LiabilitiesNotesPayableAccountsPayableUnearnedHaircuttingFeesWagesPayableMortgagePayableOwnersEquityStevTaylor,CapitalStevTaylor,WithdrawalsIncomeSummaryRevenuesHaircuttingServicesRevenue21121221

6、3214221311312313411ChartofAccountsforStevsBarberShop4-10Accumulateddepreciation,HaircuttingEquipmentStoreEquipmentAccumulatedDepreciation,StoreEquipment145146147ExpensesOfficeSalaryExpenseUtilityExpenseTelephoneExpenseRentExpenseInsuranceExpenseHaircuttingSuppliesExpenseOfficeSuppliesExpenseDeprecia

7、tionExpense,BuildingsDepreciationExpense,HaircuttingEquipmentDepreciationExpense,StoreEquipment511512513514515516517541542543ChartofAccountsforStevsBarberShop4-11Commonly Used AccountsThedesignofaccountsmustreflectthenatureofthecompanysbusinessandtheneedsofitsmanagement.Inaccounting,someimportantacc

8、ountsareusedwidelyandcommonlyineachcompany.4-12Commonly Used AccountsAsset Accounts Liability AccountsOwners Equity Accounts 4-13Asset Accounts Asset accounts4-14Asset Accounts Asset Accounts CurrentAssets Long-termAssets Cash Notes Receivable Accounts Receivable Prepaid Expenses Physical substance

9、Intangible assets4-15Current AssetsCash“Cash”istheaccountusedtorecordincreasesanddecreasesincash.TheincreaseofcashisrecordedbydebittoCashandthedecreaseisrecordedbyacredittoCash.4-16CashWhatisCash?Cashconsistsofmoneyoranymediumofexchangethatabankwillacceptatfacevaluefordeposit,andmoneyinabankorbanks.

10、Thecashaccountalsoincludescashonhandsuchasthatinacashregisterorasafe.4-17Current AssetsNotes Receivable Oftenthedebtorsignsapromissorynote,whichservesasevidenceofthedebt.NotesReceivable AccountsReceivableMoreformalthan4-18Notes ReceivableApromissorynoteisawrittenpromisetopayadefinitesumofmoneyatafix

11、edfuturedate.Whenthecompanyreceivesthenote,thenotesreceivablewillbedebited.Thecollectionofnoteswillberecordedbythecredittonotesreceivable.Interest-bearingnotes Non-interest-bearingnotes4-19Current AssetsAccounts Receivable Companiesoftensellgoodsandservicestocustomersonthebasisofthecustomerspromises

12、topayinthefuture.Thesesalesarecalledcreditsales,orsalesonaccount,andthepromisestopayareknownasaccountsreceivable.4-20Accounts ReceivableTheincreaseofAccountsReceivableisdebitedtoAccountsReceivableandthedecreaseiscreditedtoAccountsReceivable.CreditsalesincreaseAccountsReceivable.Thecollectionsofthecr

13、editsalesdecreaseAccountsReceivable.4-21Current AssetsPrepaid Expenses Thepaymentofthegoodsorservicesisoftenmadebeforetheyarereceivedorused.Theseprepaidexpensesareconsideredasassetsbeforetheyareuseduporexpired.E.g.PrepaidInsurance OfficeSupplies 4-22Long-term AssetsLong-termassetsareacquiredforusein

14、theoperationofthebusinesswithausefullifeofmorethanoneyearandarenotresoldtocustomers.Physical substance Intangible assets 4-23Long-term AssetsLand Physical substance Buildings Equipment DebitCreditPurchaseSalePurchaseSaleBuildingandequipmentsownedbyacompanymustbedepreciatedduetothewearandtear.4-24Lon

15、g-term AssetsEquipment OfficeEquipment accountStoreEquipmentaccount TrucksandAutomobilesaccount MachineryandEquipment account4-25Long-term Assetslcomputer softwarelpatentslCopyrightslTrademarklbrand namelFranchiseslmotion picture filmslcustomer listslmortgage servicing rightslLicenseslimport quotasl

16、customer and supplier relationships.Intangible assets 4-26Long-term Assets Intangible assets IASdefinesanintangibleassetasidentifiablenon-monetaryassetwithoutphysicalsubstance.Anintangibleassetisidentifiablewhenitiscapableofbeingseparatedandsold,transferred,licensed,rented,orexchanged,eitherindividu

17、allyoraspartofapackage.4-27Long-term AssetsThecostofintangibleassetsshouldbeallocatedtotheaccountingperiodsthattheybenefit.Suchallocationiscalledamortization.Intangible assets 4-28Liability Accounts Liabilityaccounts4-29Short-termLiabilities Long-TermLiabilities Liability Accounts Liability Accounts

18、 Notes Payable Accounts Payable Other Short-Term Liabilities 4-30Short-term LiabilitiesNotes Payable Notes Payable Notes ReceivableItisusedtorecordincreasesanddecreasesinpromissorynoteamountsowedtocreditors.Credited?Debited?4-31Short-term LiabilitiesItusuallyarisesastheresultofthepurchaseofmerchandi

19、se,services,supplies,orequipmentoncredit.Accounts Payable Accounts Payable Accounts ReceivableCredited?Debited?4-32Short-term LiabilitiesOther Short-Term Liabilities Thecurrentportionoflong-termliabilityWagesPayableTaxesPayableRentPayableInterestPayableCustomersAdvances(UnearnedRevenues)4-33Long-ter

20、m LiabilitiesLiabilitiesthatwillnotbedueduringthenextyearorduringthenormaloperatingcyclearelistedaslong-termliabilities.NotesdueinmorethanoneyearLong-termliabilities:BondsPropertymortgages4-34Owners Equity Accounts Owners Equity accounts4-35Owners Equity Accounts Theresourcesinvestedbytheownersinabu

21、sinessarecalledownersequity.Capital Account Withdrawals Account Revenues Accounts Expense Accounts 4-36Owners Equity Accounts Owners Equity Accounts Arises Ownersinvestmentandthenetincome Decrease Ownerswithdrawals4-37Whensomeoneinvestsinhisorherowncompany,theamountoftheinvestmentisrecordedinacapita

22、laccount.Capital AccountForinstance:whenStevTaylorinvestedhispersonalresourcesinhisfirm,herecordedtheamountintheownersequityaccounttitled Stev Taylor,Capital.4-38Withdrawals AccountForexample,anaccountcalled Stev Taylor,Withdrawals wouldbeusedtorecordtheamountthatistakenbyStevTayloroutofhiscompany.W

23、hentheownerofasoleproprietorshipusepartoftheassetsofthebusinesstopaypersonallivingexpensesitshouldberecordedinthewithdrawalsaccount.4-39 Revenues and Expense AccountsAccountsRevenuesincreaseownersequity,andexpensesdecreaseownersequity.Themoretherevenues,themoretheownersequityisincreased.Themoretheexpenses,themoretheownersequityisdecreased.4-40Revenues AccountslSalesRevenuelServiceRevenuelPhotocopyFeesEarnedl4-41Expense AccountslWagesExpenselTaxesExpenselInterestExpenselSuppliesExpensel4-42WE ARE SAILING RIGHT ALONG!