m中山大學管捏學院 经m00 BUSINESS SUN YAT-SEN UNIVERSIT Lesson 4 Adjusting Accounts for Financial statement task team of NJAV DAIEAVMAIL ACJAYNAVA School of Business, Sum Yat-sen University
Lesson 4 Adjusting Accounts for Financial Statement Task Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Yat-sen University
Outline Q Describe the purpose of adjusting accounts at the end of the period Q Prepare and explain adjusting entries for prepaid expenses, amortization, unearned revenues, accrued expenses, and accrued revenues。 Q Explain how accounting adjustments link to financial statements Q Explain and prepare an adjusted trial balance Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity
2 Outline ⧫Describe the purpose of adjusting accounts at the end of the period. ⧫Prepare and explain adjusting entries for prepaid expenses, amortization, unearned revenues, accrued expenses, and accrued revenues. ⧫Explain how accounting adjustments link to financial statements. ⧫Explain and prepare an adjusted trial balance
Review: Time period concept Definition the continued life of a business is divided into time periods of equal length. Dec 31. B/S date Dec 31, B/S date Last year income. This year income Next year income statement statement statement Past Current Future period period period going concern (business will not stop) Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 3
3 ⧫ Definition: the continued life of a business is divided into time periods of equal length. Review: Time period concept This year income statement Next year income statement Last year income statement Past period Current period Future period Dec. 31, B/S date Dec. 31, B/S date going concern (business will not stop)
Review: Revenue Recognition Principle REvenue is recorded at the time it is earned regardless of whether cash or another asset has been exchanged )$ ￥ Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity
4 Review: Revenue Recognition Principle ⧫Revenue is recorded at the time it is earned regardless of whether cash or another asset has been exchanged
Review: Matching Principle Q Expenses are to be matched in the same accounting period as the revenues they helped to earn Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 5
5 Review: Matching Principle ⧫Expenses are to be matched in the same accounting period as the revenues they helped to earn