會(huì)計(jì)專業(yè)英語(yǔ)（第2版）課件全套 耿云江 Chapter 1 Overview of Accounting-Chapter 10 Auditing

會(huì)計(jì)專業(yè)英語(yǔ)Chapter1OverviewofAccountingInthischapter,wewillexplainthebasicconceptsofaccounting.Studentsareexpectedtoknowtheconnotationofaccountingandaccountingprofessiontograsptheassumptionsandprinciplesofaccountingtodefinethequalitycharacteristicsofaccountinginformation.LearningObjectives1.1AccountingandAccountingProfession1.2AccountingAssumptions1.3AccountingPrinciples1.4QualityCharacteristicsofAccountingInformationMaincontentsinformationsystem信息系統(tǒng)economicactivitiesandevents經(jīng)濟(jì)活動(dòng)與事項(xiàng)monetaryunit貨幣單位financialcondition財(cái)務(wù)狀況operatingperformance經(jīng)營(yíng)業(yè)績(jī)financialreports財(cái)務(wù)報(bào)告bookkeepingfunction記賬職能ethicalbehavior道德行為accountinglaw會(huì)計(jì)法Keyterminologiesaccountingstandards會(huì)計(jì)準(zhǔn)則accountingfunction會(huì)計(jì)職能calculationfunction核算職能supervisionfunction監(jiān)督職能informationusers信息使用者internalusers內(nèi)部信息使用者externalusers外部信息使用者boardofdirectors董事會(huì)ChiefExecutiveOfficer(CEO)首席執(zhí)行官KeyterminologiesChiefFinancialOfficer(CFO)首席財(cái)務(wù)官，財(cái)務(wù)總監(jiān)taxoffices稅務(wù)部門external(independent)auditors外部（獨(dú)立）審計(jì)師laborunions工會(huì)businesscredit商業(yè)信用purchaseoncredit賒購(gòu)publicaccounting公共會(huì)計(jì)privateaccounting企業(yè)會(huì)計(jì)accountingforgovernmentandnonprofitorganizations

政府與非營(yíng)利組織會(huì)計(jì)publicaccountingfirmsCertifiedPublicAccountant(CPA)Keyterminologiesfinancialaccounting財(cái)務(wù)會(huì)計(jì)managementaccounting管理會(huì)計(jì)generallyacceptedaccountingprinciples(GAAP)公認(rèn)會(huì)計(jì)原則accountingassumption會(huì)計(jì)假設(shè)businessentity會(huì)計(jì)主體假設(shè)going-concern持續(xù)經(jīng)營(yíng)假設(shè)monetaryunit貨幣計(jì)量假設(shè)timeperiod會(huì)計(jì)分期假設(shè)legalentity法人實(shí)體financialreports財(cái)務(wù)報(bào)告Keyterminologiesfinancialstatements財(cái)務(wù)報(bào)表modernaccounting現(xiàn)代會(huì)計(jì)accrualbasis權(quán)責(zé)發(fā)生制historicalcost歷史成本原則realization收付實(shí)現(xiàn)制matching匹配原則fulldisclosure充分披露原則cashbasis現(xiàn)金收付制accountingelements會(huì)計(jì)要素AccountingStandardsforBusinessEnterprises企業(yè)會(huì)計(jì)準(zhǔn)則Keyterminologiesmeasurementattribute計(jì)量屬性historicalcost歷史成本currentcost現(xiàn)行成本currentmarketvalue市場(chǎng)價(jià)值netrealizablevalue可實(shí)現(xiàn)凈值presentvalue現(xiàn)值conservatism謹(jǐn)慎性thelowerofhistoricalcostormarketvalue成本與市價(jià)孰低saleoncredit賒銷parentheticalexplanations括號(hào)解釋Keyterminologiessupportingschedules明細(xì)附表cross-references交叉引用long-termleases長(zhǎng)期租賃ConceptualFrameworkforfinancialAccountingandReporting

財(cái)務(wù)報(bào)告概念框架FASB美國(guó)財(cái)務(wù)會(huì)計(jì)準(zhǔn)則委員會(huì)StatementofFinancialAccountingStandards財(cái)務(wù)會(huì)計(jì)準(zhǔn)則公告QualitativeCharacteristicsofAccountingInformation會(huì)計(jì)信息質(zhì)量特征KeyterminologiesStatementofFinancialAccountingConcepts財(cái)務(wù)會(huì)計(jì)概念公告predictivevalue預(yù)測(cè)價(jià)值feedbackvalue反饋價(jià)值presentedonatimelybasis被及時(shí)提出netincome凈利潤(rùn)SEC美國(guó)證券交易委員會(huì)representationalfaithfulness反映的真實(shí)性balancesheet資產(chǎn)負(fù)債表fixedassets固定資產(chǎn)KeyterminologiesAccountingisaninformationsystemdesignedtoidentify,record,andreflecteconomicactivitiesandeventsaboutanenterprisewithmonetaryunitasitsmaincriterion.Theprimaryobjectiveofaccountingistoprovideusefulinformationtodecisionmakers.1.1AccountingandAccountingProfession1.1.1EthicsofAccounting1.1.2FunctionsofAccounting1.1.3UsersofAccountingInformation1.1.4AccountingProfessionMaincontentsof1.1AccountingandAccountingProfessionEthicisanideologicalstandardbywhichone’sconductsarejudgedasrightorwrong,honestordishonest,andfairornotfair.Whenanalyzingeconomicactivitiesinvolvingethics,itishelpfulforaccountantstofollowthefollowingthreesteps.recognizetheethicalsituationandtheinvolvedethicalissues.identifyandanalyzetheprincipalelementsintheethicalsituationinordertofigureoutwhoorwhichgroupmaybeharmedbyorbenefitedfromthissituation,andwhichpartyshouldtaketheresponsibilityandobligation.identifythealternatives,andtoassesstheimpactofeachalternativetoitsstakeholders.1.1.1EthicsofAccountingTheaccountingfunctionreferstotheobjectivefunctionsoftheaccountingduringoperationandmanagement.CalculationfunctionByusingthemonetaryformandcertainmethodsorprocedures,accountingrecordstheeconomicactivities,andthenmakesthenecessarycalculation,sorting,processing,andsummarizingsoastoputdataintoaseriesofinformationthatcouldreflectaccountingobjects,andsummarizeproducingandoperatingactivitiesandtheirresults.Supervisionfunction

toexaminetheauthenticity,legality,andrationalityofeconomicbusinessesofaspecificaccountingsubjectwhentheaccountingpersonnelcarryoutthecalculationfunction.Justascalculationfunction,itisoneofthebasicfunctionsofaccounting,andisalsoanimportantcomponentofChineseeconomicsupervisionsystem.Inadditionprediction,decisionmaking,analysis,andsoon.1.1.2FunctionsofAccountingInternalusersInternalusersofaccountinginformationaretheuserswhoareinsideanenterpriseandplan,organize,manageitsbusinessSuchasboardofdirectors,ChiefExecutiveOfficer(CEO),ChiefFinancialOfficer(CFO),andsoon.Byreadingandanalyzingthedetailedinformationaboutthecompany’sfinancialpositionandfinancialperformance,theseinternaluserscouldmaketheirowndecisionsaboutoperating,financing,andinvesting.1.1.3UsersofAccountingInformationExternalusersTheuserswhoareoutsidetheenterpriseSuchasshareholders(investors),creditors(lenders),taxoffices,external(independent)auditors,laborunions,andsoon.Differentexternalusersneeddifferentkindsofinformation.1.1.3UsersofAccountingInformationTheaccountingprofessioncanbedividedintothreebroadcategories:publicaccounting,privateaccounting,andaccountingforgovernmentandnonprofitorganizations.Publicaccountingprovidesaccountingservicestothepubliconacompensablefoundationbase.1.1.4AccountingProfessionPrivateaccountingmodernaccountingcanbedividedintotwomainbranches:financialaccountingandmanagementaccounting.Financialaccountingconcernedwithprovidingaccountinginformationtoshareholders,creditors,andotherinformationusers.Itmeasuresandrecordsbusinesstransactionsandpreparesfinancialstatementstoconveyinformation.managementaccountinghelpmanagerstochoose,communicate,andimplementappropriatestrategies,andthenhelpthecompanyfulfillitsdevelopmenttargets.Accountingforgovernmentandnonprofitorganizationsprovidesaccountingservicetogovernmentandnonprofitorganizations.twomajoractivities:1.tocheckandsupervisetheimplementationofbudgetforeachlevelofthegovernmentandallthenon-profitorganizations.2.toidentify,measureandreportallthefinancialincomesandexpendituresofgovernmentandnonprofitorganizationsaswellasthecorrespondingresult.TheEndof1.1Areasonablesettingforthescope,contents,basicprocedures,andmethodsofaccounting.ThebasicpremiseofaccountingcalculationFourmajoraccountingassumptionsBusinessentityGoing-concernMonetaryunitTimeperiod1.2AccountingAssumptions1.2.1BusinessEntity1.2.2Going-concern1.2.3MonetaryUnit1.2.4TimePeriodMaincontentsof1.2AccountingAssumptionsAbusinessentityshouldbeaccountedseparatelyfromotherbusinessentities,includingitsowner.ThebusinessentityAunitwhichhasindependenceorrelativeindependenceinmanagementoreconomy.Alsoaneconomicunitstandsonitsowninterest.1.2.1BusinessEntity

Asthebasicpremiseofaccounting,it’sofgreatsignificancetoidentifythebusinessentity.Firstly,businessentityassumptionhelpstodefinethespacialscaleofaccounting.Secondly,thisassumptiondefinesthescopeofeconomicbusinessactivitiesandeventsthatneedtobetreatedbytheaccounting.Businessentityisdifferentfromlegalentity.

Alegalentitymustbeabusinessentity,butabusinessentityisnotalwaysalegalentity.Abusinessentitycouldbealegalentityanditalsocouldbeanon-legalentity.Thebusinessactivitiesofanaccountingentitywillcontinueindefinitely,andwillnotdisappearforbankruptcy,liquidation,anddissolutionintheforeseeablefuture.Ifaspecificentityisactuallythreatenedbybankruptcyorliquidation,thegoing-concernassumptionshouldbeabandoned.Ifthegoing-concernassumptionisnotapplicablebecauseofthreatensfromliquidationorbankruptcy,thefinancialstatementsmustclearlydisclosethissituation.1.2.2Going-concern

Monetaryunitassumptionmeansthattheaccountingisbasedonthemeasurementofcurrencywithcurrencystability.Becauseonlyinthesituationofcurrencyisstableorrelativelystable,theassetvalueatdifferentpointsoftimecanbecomparable,theincomeandexpenseduringthesameperiodcanbecompared,operatingresultscanbecalculatedanddetermined,andtheaccountinginformationprovidedbythefinancialstatementscantrulyreflecttheoperatingconditionofanenterprise.Moneyisthecommongroundofbusiness.1.2.3MonetaryUnit

Thetimeperiodassumptionpresumesthatthelifeofagoing-concerncompanycanbedividedintoperiods,suchasmonths,quarters,years,sothatfinancialreportscanbepreparedseparatelybythoseperiods.Accordingtothegoing-concernassumption,abusinesswillcontinuetooperatebythecurrentsizeandstatus.It’snecessaryforenterprisestodivideitswholelifeintocontinuousperiodofequalduration,andthentorecognize,measure,andreportitsfinancialcondition,operatingresults,andcashflowsineachperiod.Thetimeperiodassumptionalsomakesdifferenttypesofaccountingentitieshaveanaccountingbenchmark,andthenexertsreceivables,payables,depreciation,amortization,andotheraccountingtreatmentmethods.1.2.4TimePeriodInsummary,thesefourfundamentalaccountingassumptionsdependoneachotherandcomplementeachother.Theaccountingentityassumptionestablishesthescopeofaccounting.Thetimerangeofaccountingisestablishedbythegoing-concernassumptionandtimeperiodassumption.Monetaryunitassumptionprovidesthenecessarymeansforaccounting.Withouttheaccountingentityassumption,thegoing-concernassumptionwouldloseitsmeaning.Therewouldbenotimeperiodwithoutgoing-concernassumption.Withoutmonetaryunitassumption,therewouldbenomodernaccounting.TheEndof1.2Therearefivebasicaccountingprinciplesthatareusedtorecordeconomictransactions:(1)Accrualbasis;(2)Historicalcost;(3)Realization;(4)Matching;(5)Fulldisclosure.1.3AccountingPrinciples1.3.1Accrualbasis1.3.2Historicalcost1.3.3Realization1.3.4Matching1.3.5FulldisclosureMaincontentsof1.3Theaccrualbasisofaccountingrecognizesrevenuewhenrealizedandexpenseswhenincurred.Itreferstoallrevenuesandcostswhichincurredinthecurrentperiod,whetherornotthepaymentisreceivedorpaid,treatedastheincomeandexpensesofthecurrentperiod.Onthecontrary,thosewhodonotbelongtothisperiodofincomeandexpenses,eveniftheamountisreceivedorpaidinthisperiod,shouldn’tbetreatedasincomeorexpensesofthecurrentperiod.1.3.1AccrualBasis

Undertheaccrualbasis,thecriteriafortherecognitionofrevenuesareasfollows:Theprocesstoearnrevenueiscompletedandtheauthoritytoreceivepaymentisobtained，butnotthemoneyhasbeencollected.Undertheaccrualbasis,thecriteriafortherecognitionofexpensesaretherelatedbenefitshavebeenenjoyedandtheobligationofpaymenthasbeenassumed,andrathernotthepaymentshavebeenpaid.Accrualbasisisastandardtakingwhetherhaveobtainedtheauthorityofreceivingpaymentorassumedthepaymentobligationasthecriteriontorecognizerevenuesandexpenses.Itcouldreflecttheoperatingperformanceofenterprisesindifferentperiodsmorereasonably.Theaccrualbasisrequiresnumerousadjustmentsattheendofanaccountingperiod.Aboveall,wecandigoutthattheuseoftheaccrualbasiscomplicatestheaccountingprocess.Thenwhydoweuseit?That’sbecausethemeasurementresultofanentity’sfinancialconditionandoperatingperformancebasedonaccrualbasisismorerepresentativethanthatbasedoncashbasis.Meanwhile,ifwithoutaccrualbasis,itwouldbeunnecessarytomakethetimeperiodassumption.Cashbasisaccountingistodealwitheconomictransactions,torecognizerevenuesandexpensesaccordingtowhetheractuallyreceiptandpaymentofmoneyhasincurred.Basedoncashbasis,ifpaymentisactuallypaidduringoneperiod,regardlessofwhetheritbringbenefitstothecompanyinthecurrentperiod,itshouldberecognizedasacostorexpense;Ifcashisactuallyreceivedduringoneperiod,regardlesswhetherit’searnedduringthisperiod,itshouldbetreatedasrevenue.Inpractice,immaterialitemsarefrequentlyhandledoncashbasis,andsomespecificstandardsalsoallowtheapplicationofcashbasis.InChina,accrualbasisisrequiredtouse.Measurementattributeisthebasisofdeterminingtheamountofaccountingelements.Therearetypicallyfivemeasurementattributes,historicalcostcurrentcostcurrentmarketvaluenetrealizablevaluepresentvalue.Historicalcostmeanstorecordaccountingelementsbasedonthecostwheneconomicbusinessoccurs.1.3.2HistoricalCostTherealizationprincipleprovideguidanceonwhenacompanymustrecognizerevenue,andthenhelpaccountantstosolvethisproblem.Threeconceptsareimportanttorevenuerecognition.(1)Revenueisrecognizedwhenearned.Theearningsprocessisgenerallycompletewhenservicesareperformedortheownershipofproductsistransferredtothebuyer.(2)Proceedsfromsellingproductsandservicesneednotbeincash.Forexample,whenacustomerpurchasesmerchandisesandpromisestopayatafuturedate,thissaleiscalledsaleoncredit.(3)Revenueismeasuredbythecashreceivedplusthecashvalueofanyotheritemsreceived.Therecognitionofrevenueatthecompletionoftheproductionprocessisacceptablewhenthepriceoftheitemisknownandthereisareadymarket.1.3.3Realization

Thematchingprincipleprescribesthatacompanyrecordtheexpensesitincurredtogeneratetherevenuereported.Thebasicintentistodeterminetherevenuefirstandthenmatchtheappropriatecostsagainstthisrevenue.Toallocatethesecostsagainstrevenues,therearesomesystematicpolicieswhichcanbeadopted.Theprincipleofmatchingandrealizationareessentialtomodernaccounting.1.3.4Matching

Theaccountingreportsmustdiscloseallfactsthatmayinfluencethejudgmentofaninformedreader.Thisprincipleprescribesthatacompanyreportthedetailsbehindfinancialstatementsthatwouldimpactuser’sdecisions.Thereareseveralmethodsofdisclosureparentheticalexplanationssupportingschedulescross-referencesnotes.Becauseofthecomplexityofthebusinessandtheincreasedexpectationsofthepublic,tofulldiscloseisbecomingmoreandmoredifficult.1.3.5FullDisclosure

TheEndof1.3TheConceptualFrameworkforFinancialAccountingandReportingwassetbyFASBsinceitsinceptionin1973.TheFrameworkisintendedtosetforthasystemofinterrelatedobjectivesandunderlyingconceptsthatwillserveasthebasisforevaluatingexistingstandardsoffinancialaccountingandreporting.1.4QualityCharacteristicsofAccountingInformationInMay1980,theframeworkprojectissuedaconceptstatementofQualitativeCharacteristicsofAccountingInformation(SFACNo.2).Itexaminesthecharacteristicsthatmakeaccountinginformationusefulforinvesting,credit,andsimilardecisions.Thosecharacteristicsofaccountinginformationthatmakeitadesirablecommoditycanbeviewedasahierarchyofqualities,withunderstandabilityandusefulnessfordecisionmakingofmostimportance1.4QualityCharacteristicsofAccountingInformationTheprimarydecision-specificqualitiesrelevanceReliabilityTwosecondaryqualitiescomparabilityconsistency1.4.1Relevance1.4.2Reliability1.4.3Comparability1.4.4MaterialityMaincontentsof1.4QualityCharacteristicsofAccountingInformationTomakeaccountinginformationbevaluable,itshouldberelatedtodecision-making.Forinformationtoberelevant,itneedspredictivevaluefeedbackvaluepresentedonatimelybasis1.4.1RelevanceReliabilityistheextenttowhichinformationshouldbewithverifiability,representationalfaithfulness,andneutrality.Verifiabilitymeanstheaccountinginformationcanbeprovedtobetrue.Itimpliesaconsensusamongdifferentmeasures.Representationalfaithfulnessmeansinformationshouldmatchwhatreallyexisted.Faithfulnessexistswhenthereisanagreementbetweenameasureordescriptionandthephenomenonitpurportstorepresent.

Neutralitymeanscannotselectinformationforfavoroneoveranother.1.4.2Reliability

Comparabilityistheabilitytohelpusersdistinguishsimilaritiesanddifferencesbetweeneventsandconditions.Consistencyrequiresanentitytogivethesametreatmenttocomparabletransactionsfromperiodtoperiod.1.4.3ComparabilityMaterialityconceptinvolvestherelativesizeandimportanceofanitemtoafirm.Forusersofaccountinginformation,theinformationfordecision-makinghasimportantinfluenceandismostimportant.Ifaccountinginformationmisplacedpriorities,itwillmisleaddecision-makingandleaduserstomakewrongdecisions.It’simportanttonotethatanitemmaterialtooneentitymaynotbesomaterialtoanother.Thedeterminationofmaterialityislargelydependsontheprofessionaljudgmentofaccountants.1.4.4MaterialityTheEndofChapter1會(huì)計(jì)專業(yè)英語(yǔ)Chapter2AccountingCycle

Tounderstandaccountinginformation,weneedtoknowhowanaccountingsystemcapturesrelevantdataabouttransactions,andthenclassifiesrecords,andreportsdata.2.1AccountingEquationandDouble-entryAccountingTheaccountingsystemreflectstwobasicaspectsofafirm:whatitownsandwhatitowes.Assetsareresourcesthatownedorcontrolledbyacompanyandcouldbringbenefitstoitinthefuture,suchascash,supplies,equipment,andland.Theclaimsonacompany’sassets(whatitowesofafirm)areseparatedintoliabilitiesandequity.Liabilitiesarewhatacompanyowesitscreditorinfuturepayments,productsorservices.Equity(alsocalledowner’sequityorcapital)referstotheclaimsofitsowner(s).2.1.1AccountingEquation

Therelationofassets,liabilities,andequityisreflectedinthefollowingaccountingequation:Assets=Liabilities+EquityInthisequation,liabilitiesareusuallyshownbeforeequitybecausecreditors’claimsmustbepaidbeforetheclaimsofowners.Theaccountingequationappliestoalltransactionsandevents,toallformsofcompaniesandorganizations,andtoallpointsoftime.Themechanicrequiringthateverytransactionshouldberecordedinthedebitsideandcreditsideofoneormoreaccountswiththeequalamount.Thedouble-entrysystemisbasedontheaccountingequation.2.1.2Double-entrySystem

Assets=Liabilities+Owner’sequityDebitforCreditforDebitforCreditforDebitforCreditforIncreasesDecreasesDecreasesIncreasesDecreasesIncreasesTheincreaseordecreaseofdifferenttypesofaccountswouldberecordedasfollows:Therecordingofaccountingtransactionsunderdouble-entrysystemmaybeformulatedinthefollowingfourrules(1)Theincreaseofassetshouldbedebitedtoassetaccountsandthedecreaseofassetshouldbecredited.(2)Theincreaseofliabilityandowners’equityitemsshouldbecreditedtoliabilityandowners’equityaccountsandthedecreaseshouldbedebited.(3)Asrevenueseventuallyincreaseowners’equity,theincreaseofrevenueshouldbecreditedtoarevenueaccount,andthedecreaseshouldbedebited.(4)Asexpenseseventuallydecreaseowners’equity,theincreaseofexpenseshouldbedebitedtoanexpenseaccount,andthedecreaseshouldbecredited.Theaccountingcycleistheaccountingprocedures(orsteps)inpreparingfinancialstatement.Thereasonforthenameofcycleisthattheproceduresarerepeatedduringeachreportingperiodbythesamesequence.Theaccountingcyclestartswithanalyzingtransactionsandendswithpreparingfinancialstatements.2.2DefinitionofAccountingCycle

Theaccountingcyclegenerallyconsistsofthefollowingprocedures.(1)Analyzingtransactionsandeventsastheyoccur.(2)Journalizingtransactionsinajournal.(3)Postingjournalentriestotheappropriateledger.(4)Preparinganunadjustedtrialbalance.(5)Preparingadjustingjournalentriesandpostingthemtotheledger.(6)Preparinganadjustedtrialbalance.(7)Preparingclosingjournalentriesandpostingtotheledger.(8)Preparingpost-closingtrailbalance.(9)Preparingfinancialstatements.(10)Preparingreversingentriesinthenextperiodifnecessary.Tohaveabetterillustrationoftheproceduresinanaccountingcycle,weshowthesestepsintheExhibit2-1.Journalisachronologicalrecordofeachbusinesstransactioninorderofdate.Sometimesthejournalisalsocalledthebookoforiginalentry,becauseitistheaccountingrecordinwhichtransactionsarefirstrecorded.Journalscanbeclassifiedintogeneraljournalsandspecialjournals.Aspecialjournalisanaccountingjournaldesignedtorecordaspecifictypeoftransaction.Ageneraljournalisusedfortransactionsthatdonotfitoneofthespecialjournals.2.3.1JournalsThegeneraljournalhasadisadvantagedifferenttypesoftransactionswillberecordedinascatteredsituationwhichisdetrimentalforcompaniestoreflectandcontrolimportantandregulartransactions.CompaniesneedtousespecialjournalsThecommonspecialjournalincludessalesjournalcashjournalpurchasesjournalThecollectionofallaccountsandtheirbalancesinaninformationsystemiscalledaledger.Aledgerisalsocalledbooksoffinalentry.Itrecordsclassifiedandsummarizedfinancialinformationfromjournalsandshowstheircurrentbalances.Theledgeraccountisaseparatepageinaledgerthatrecordsincreasesanddecreasesineachbalancesheetitem,classifiedunderassets,liabilities,orowners’equity.Theledgeraccountcanbeclassifiedintogeneralledgeraccountandsubsidiaryledgeraccount.2.3.2Ledgers

Thegeneralledgeraccountisanaccountorrecordusedtosortandstorebalancesheetandincomestatementtransactions.ExamplesofgeneralledgerincludetheassetaccountssuchasCash,AccountsReceivable,Inventory,Investments,LandandEquipment.ExamplesofthegeneralledgerliabilityaccountsincludeAccountsPayable,NotesPayable,andAccruedExpensesPayable.ExamplesofincomestatementaccountsincludeSalesRevenue,ServiceRevenues,SalariesExpense,RentExpense,AdvertisingExpense,InterestExpense,andLossonDisposalofAssets.1.GeneralLedgerAccountThesubsidiaryledgeraccountisalsocalledsupportingledgeraccount,whichcontainsthedetailedinformationtosupportageneralledgeraccount.2.SubsidiaryLedgerAccountToensurethattheledgerisup-to-date,entriesshouldbepostedfromjournaltoledgerassoonaspossible.Thismightbedonedaily,weekly,orwheneverisrequired.Allentriesmustbepostedtotheledgerbeforefinancialstatementsarepreparedtoensurethattheaccountbalancescouldbetransferredintothecorrespondingledgeraccountstimelyandcorrectly.3.PostingJournalEntriestoLedgeraccountsAccordingtotheaccrual-basisaccountingprincipleandthematchingprinciple,allrevenuesearedandexpensesincurredduringthesameperiodmustbereportedregardlesswhethertherelatedcashtorevenuesorexpensesisreceivedorpaid.Therefore,itisnecessarytopreparetheadjustingjournalentriesattheendofanaccountingperiod.Therearefourtypesofadjustingjournalentries,includingprepaidexpenses,unearnedrevenues,accruedexpenses,andaccruedrevenues.2.4Adjusting

Prepaidexpensesarepaymentsofexpensesinadvance,whichrefertoitemspaidforinadvanceinordertoreceivetheirbenefits.Prepaidexpensesareassets.Whentheseassetsareused,theircostswillbecomeexpenses.2.4.1PrepaidExpenses

Withthepassageoftime,thebenefitsoftherentgraduallyexpire,andaportionofthePrepaidRentassetbecomesexpense.OnJan.31,20×7,thePrepaidRentaccountshouldbedecreasedbytheportionthathasbeenusedup.Theusedupportionis$2

000(24

000/12×1),sotheadjustingjournalentryshouldtransfer$2,000ofPrepaidExpensetoRentExpense.Thespecificadjustingentryis：RentExpense 2

000

PrepaidRent 2

000Depreciationistheprocessofallocatingthecostsoffixedassetsovertheirexpectedusefullives.Theadjustingjournalentryofdepreciationissimilartothatforprepaidexpenses.Themaindifferenceofthemisthelengthoftime.Prepaidexpensesusuallyexpirewithinoneyear,whilemostofthefixedassetskeepbeingusefulforseveralyears.SupposethatNCo.purchasedamachinefor$15

000onNov.120×7.Machine 15

000

Cash 15

000Themachineisexpectedtohaveausefullifeoffiveyearsandhavenoresidualvalueattheendofthisperiod.Thedepreciationmethodofthiscompanyisstraight-linemethodwhichmeansthemonthlydepreciationwillbe$250(15

000÷(5×12)).Thenthedepreciationofthefirstdepreciablemonthis$250($15

000÷60)anditwillberecordedbythisentry:DepreciationExpense 250

AccumulatedDepreciation 250Accruedexpensesareexpensesthathaveoccurredinaperiodbuthavenotbeenpaid.Accruedexpensemustbereportedintheincomestatementoftheperiodwhenincurred.Commonexamplesofaccruedexpensesareaccruedsalary,accruedinterest,accruedrent,andaccruedtaxes.2.4.2AccruedExpenses

SupposethatNCo.have20employeesandpays$100perdayperemployeeor$500forafive-dayworkweekbeginningfromMondayandendingonFriday.Itsemployeesarepai