9 ways of Accounting?
1. Create Journal 2. Post J/E to ledger (T-accounts) 3. Prepare unadjusted Trial balance 4. Unadjusted Trial balance 5. Adjusted Entries 6. Adjusted Trial Balance 7. Financial Statements 8. Closing Entries 9. Posting Closing Trial Balance
What 3 things is 4. Adjusting Entrees?
1. Revenue/Expense (I/S) 2. Balance Sheet 3. No cash "Adjusting Entrees never have cash"
4 types of Adjusting entrees
1. (Deferral) Converting Assets ->to Expenses
2. (Deferral) Liability (down) -> Revenue (up)
3. (Accrual) Intrest/Salaries -> Accrual unpaid exp.
4. (Accrual) Uncollected Rev.
Adjusting Entrees Deferral means
1. Cash 2. Rev./Expenses and pushed back
Adjusting Entrees Accrual means
1. Rev/Exp. 2. Cash (Receive cash or pay it) and add up
Do Assets and contrast assets stick together? T or F
T
accrue
To grow or accumulate over time
accumulated depreciation
Depreciation taken throughout the useful life of an asset is accumulated in this account
Adjusted Trial Balance
A schedule indicating the balance in ledger accounts after end-of-period adjusting entries have been posted. The amounts shown in the adjusted trial balance are carried directly into financial statements.
Unearned Rev. is a
Liability- can be current if earned within the year
Current asset can be converted when?
within the year or less
Adjusted Trial balance
1. I/S
2. R/E
3. Statement of C/F
Retained Earning
Beg. R/E + N/I - Div.=End R.E.
Disclosure
Acc. Methods deprecation methods
Due dates of major liabilities
Temporary Accounts
Income Statement Rev. + Exp., Inc. Summary, Dividends
Permanent Accounts
B.S. Accounts, R/E
Closing Entries to Close Rev.
to Inc. Summary
Closing Entries to Close Exp.
to Inc. Summary
Closing Entries to Income Summary
to R/E
Closing Entries to Dividends
R/E
Unexpired and Prepaid =
Asset
Consulting Fes Earned=
Rev.
Profitability
Make a profit, gain a benefit
Liquidity
Having the financial ability to pay debts as they become due
Normal Order in which Financial Statements are prepared?
Income Statement, Statement of Retained Earnings, Balance Sheet
Accrual Accounting
Revenue when earned, Expenses when occurred
