Fundamental_Accounting_Principles_Chap002

1、PowerPoint Authors:Susan Coomer Galbreath, Ph.D., CPACharles W. Caldwell, D.B.A., CMAJon A. Booker, Ph.D., CPA, CIACynthia J. Rooney, Ph.D., CPAChapter 02ANALYZING AND RECORDING TRANSACTIONSMcGraw-Hill/Irwin Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.2 - 2Analyze each tran

2、saction and event from source documentsANALYZING AND RECORDING PROCESSRecord relevant transactions and events in a journalPost journal information to ledger accountsPrepare and analyze the trial balanceC 12 - 3Sales TicketsBank StatementsPurchase OrdersChecksSOURCE DOCUMENTSBills from SuppliersEmplo

3、yee EarningsRecordsC 12 - 4An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.THE ACCOUNT AND ITS ANALYSISThe general ledger is a record containing all accounts used by the company. C 22 - 5THE ACCOUNT AND ITS ANALYSISOwner, CapitalOwne

4、r, WithdrawalsC 22 - 6LandEquipmentBuildingsCashNotes ReceivableSuppliesPrepaid AccountsAccounts ReceivableAssetAccountsASSET ACCOUNTSC 22 - 7Accrued LiabilitiesUnearned RevenueNotes PayableAccounts PayableLiabilityAccountsLIABILITY ACCOUNTSC 22 - 8RevenuesOwners CapitalOwners WithdrawalsExpensesEQU

5、ITY ACCOUNTSC 22 - 9LiabilitiesEquityAssets=+THE ACCOUNT AND ITS ANALYSISC 22 - 10LEDGER AND CHART OF ACCOUNTSThe chart of accounts is a list of all accounts and includes anidentifying number for each account.C 32 - 11DEBITS AND CREDITSC 42 - 12LiabilitiesEquityAssets=+DOUBLE-ENTRY ACCOUNTINGDebit C

6、reditDebit CreditDebit CreditASSETS + -LIABILITIES - +EQUITIES - +C 4NormalNormalNormal2 - 13_+_Debit CreditOwners Capital - +Debit CreditOwners Withdrawals + -Debit CreditExpenses + -Debit Credit Revenues - +DOUBLE-ENTRY ACCOUNTINGC 42 - 14DOUBLE-ENTRY ACCOUNTINGAn account balance is the difference

7、 between the increases and decreases in an account. Notice the T-Account.C 42 - 15JOURNALIZING & POSTING TRANSACTIONSStep 1: Analyze transactions and source documents.LiabilitiesEquityAssets=+Step 2: Apply double-entry accountingACCOUNT NAME:ACCOUNT No.DateDescriptionPRDebitCreditBalanceStep 4:

8、Post entry to ledgerGENERAL JOURNALPage 123DateDescriptionPost. Ref.DebitCreditStep 3: Record journal entryP 12 - 16Dollar amount of debits and creditsJOURNALIZING TRANSACTIONS Transaction DateTransaction explanationTitles of Affected AccountsP 12 - 17BALANCE COLUMN ACCOUNTT-accounts are useful illu

9、strations, but balance column ledger accounts are used in practice.P 12 - 181Identify the debit account in ledger.POSTING JOURNAL ENTRIESP 12 - 192Enter the date.POSTING JOURNAL ENTRIESP 12 - 203Enter the amount and description.POSTING JOURNAL ENTRIESP 12 - 214Enter the journal reference.POSTING JOU

10、RNAL ENTRIESP 12 - 225Compute the balance.POSTING JOURNAL ENTRIESP 12 - 23Enter the ledger reference.6POSTING JOURNAL ENTRIESP 12 - 24ANALYZING TRANSACTIONSAnalysis:Double entry:101301Posting:A 12 - 25ANALYZING TRANSACTIONSAnalysis:Double entry:126101Posting:A 12 - 26ANALYZING TRANSACTIONSAnalysis:D

11、ouble entry:167101Posting:A 12 - 27ANALYZING TRANSACTIONSAnalysis:Double entry:126201Posting:A 12 - 28ANALYZING TRANSACTIONSAnalysis:Double entry:403101Posting:A 12 - 29After processing its remaining transactions for December, FastForwards Trial Balance is prepared.DebitsCreditsCash4,350$ Accounts r

12、eceivable- Supplies9,720 Prepaid Insurance2,400 Equipment26,000 Accounts payable6,200$ Unearned consulting revenue3,000 C. Taylor, Capital30,000 Owners Withdrawals200 Consulting revenue5,800 Rental revenue300 Salaries expense1,400 Rent expense1,000 Utilities expense230 Total45,300$ 45,300$ FastForwa

13、rdTrial BalanceDecember 31, 2011The trial balance lists all account balances in the general ledger. If the books are in balance, the total debits will equal the total credits.P 22 - 30PREPARING A TRIAL BALANCEPreparing a trail balance involves three steps: List each account title and its amount (fro

14、m ledger) in the trial balance. If an account has a zero balance, list it with a zero in the normal balance column (or omit it entirely). Compute the total of debit balances and the total of credit balances.1. Verify (prove) total debit balances equal total credit balances.P 22 - 31SEARCHING FOR AND

15、 CORRECTING ERRORSIf the trial balance does not balance, the error(s) must be found and corrected.Make sure the trial balance columns are correctly added.Make sure account balances are correctly entered from the ledger.See if debit or credit accounts are mistakenly placed on the trial balance.Re-com

16、pute each account balance in the ledger.Verify that each journal entry is posted correctly.Verify that each original journal entry has equal debits and credits.P 22 - 32USING A TRIAL BALANCE TO PREPARE FINANCIAL STATEMENTSP 32 - 33INCOME STATEMENTP 32 - 34STATEMENT OF OWNERS EQUITYC. Taylor, Capital

17、 12/1/11-$ Net income for December3,470 Plus: Investments by Owner30,000 33,470 Less: Owner Withdrawals200 C. Taylor, Capital, 12/31/1133,270$ Statement of Owners Equity For the Month Ended December 31, 2011 FASTFORWARDP 32 - 35BALANCE SHEETP 3C. Taylor, Capital 12/1/11-$ Net income for December3,47

18、0 Plus: Investments by Owner30,000 33,470 Less: Owner Withdrawals200 C. Taylor, Capital, 12/31/1133,270$ Statement of Owners Equity For the Month Ended December 31, 2011FASTFORWARD2 - 36PRESENTATION ISSUES Dollar signs are not used in journals and ledgers. Dollar signs appear in financial statements

19、 and other reports such as trial balances. The usual practice is to put dollar signs beside only the first and last numbers in a column. When amounts are entered in the journal, ledger, or trial balance, commas are optional to indicate thousands, millions, and so forth. Commas are always used in fin

20、ancial statements. Companies commonly round amounts in reports to the nearest dollar, or even to a higher level.P 32 - 37GLOBAL VIEWBoth U.S. GAAP and IFRS prepare the same four basic financial statements. A few differences are found within each statement, but over time these differences are likely to be elimi