tailieunhanh - Lecture Issues in financial accounting – Lecture 5: Adjusting entries, financial statement, closing entries
In this chapter, the following content will be discussed: Explain the time period assumption, explain the accrual basis of accounting, explain the reasons for adjusting entries, identify the major types of adjusting entries, prepare adjusting entries for deferrals. | Adjusting Entries, Financial Statement, Closing Entries Lecture 05 Explain the reasons for preparing adjusting entries. Prepare financial statement from the adjusted trial balance. Prepare closing entries. Learning Objectives Adjusting Entries for Accruals Illustration 3-27 Accruals are either accrued revenues or accrued expenses. LO 5 Explain the reasons for preparing adjusting entries. Revenues earned but not yet received in cash or recorded. Adjusting Entries for “Accrued Revenues” rent interest services performed BEFORE Accrued revenues often occur in regard to: Cash Receipt Revenue Recorded Adjusting entry results in: LO 5 Explain the reasons for preparing adjusting entries. Accrued Revenues. In October Pioneer earned $2,000 for advertising services that it did not bill to clients before October 31. Thus, Pioneer makes the following adjusting entry. Service revenue 2,000 Accounts receivable 2,000 Oct. 31 Debit Credit Accounts Receivable 72,000 Adjusting Entries for “Accrued . | Adjusting Entries, Financial Statement, Closing Entries Lecture 05 Explain the reasons for preparing adjusting entries. Prepare financial statement from the adjusted trial balance. Prepare closing entries. Learning Objectives Adjusting Entries for Accruals Illustration 3-27 Accruals are either accrued revenues or accrued expenses. LO 5 Explain the reasons for preparing adjusting entries. Revenues earned but not yet received in cash or recorded. Adjusting Entries for “Accrued Revenues” rent interest services performed BEFORE Accrued revenues often occur in regard to: Cash Receipt Revenue Recorded Adjusting entry results in: LO 5 Explain the reasons for preparing adjusting entries. Accrued Revenues. In October Pioneer earned $2,000 for advertising services that it did not bill to clients before October 31. Thus, Pioneer makes the following adjusting entry. Service revenue 2,000 Accounts receivable 2,000 Oct. 31 Debit Credit Accounts Receivable 72,000 Adjusting Entries for “Accrued Revenues” Debit Credit Service Revenue 100,000 4,000 2,000 106,000 2,000 74,000 LO 5 LO 5 Adjusting Entries for “Accrued Revenues” Illustration 3-35 Illustration 3-35 Expenses incurred but not yet paid in cash or recorded. Adjusting Entries for “Accrued Expenses” rent interest taxes BEFORE Accrued expenses often occur in regard to: Cash Payment, if any* Expense Recorded salaries bad debts* Adjusting entry results in: LO 5 Explain the reasons for preparing adjusting entries. Adjusting Entries for “Accrued Expenses” Accrued Interest. Pioneer signed a three-month, 12%, note payable in the amount of $50,000 on October 1. The note requires interest at an annual rate of 12 percent. Three factors determine the amount of the interest accumulation: 1 2 3 Illustration 3-29 LO 5 Explain the reasons for preparing adjusting entries. Interest payable 500 Interest expense 500 Oct. 31 Debit Credit Interest Expense 500 500 Debit Credit Interest Payable Adjusting Entries for “Accrued Expenses” Accrued .
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