财务基础知识2

1RecordingBusinessTransactionsLearningObjectives:Understandthedual-entryrecordingframeworkandDiscusstheaccrualbasisofaccountingDiscussionSection#2FinancialReportingEWMBA-202LopoMartinez2ACCOUNTINGPROCESSEVENTSTRANSACTIONSFINANCIALSTATEMENTSJOURNALLEDGERDOCUMENTATIONJournalizingPostingFINANCIALSTATEMENTSTheAccuracySummaryTRIALBALANCE1.Journalizing2.Posting3.Preparingatrialbalance4.Recordingadjustingentries5.Preparingfinancialstatements3DebitsandCreditsAccountTitleDebitCredit(Dr.)(Cr.)LeftSideRightSide•Debit(dr.)-anentryorbalanceontheleftsideofanaccount•Credit(cr.)-anentryorbalanceontherightsideofanaccountOnedebitOnecreditEachtransactionisrecordedwithatleast:Totaldebitsmustequaltotalcredits.andDRCR4DebitsandCreditsintheAccountsRevenuesDr.Cr.(–)(+)ExpensesDr.Cr.(+)(–)–AssetsDr.Cr.(+)(–)LiabilitiesDr.Cr.(–)(+)O.EquityDr.Cr.(–)(+)=+=NetIncome5MechanicsofDoubleEntryAccountingCanyouidentifythetypeoftransactionbelow?+-+++-+-1234Noticethatineachofthetransactions,theequationbalances(+and-)Noticealsothatthedebitsandcreditsareequalineachtransaction=+AssetsLiabilitiesOwner’sEquityDebitforIncreasesCreditforDecreasesDebitfordecreasesDebitfordecreasesCreditforIncreasesCreditforIncreases5+-6JournalEntries•Accountantsrecordatransactionbymakingajournalentry.•AjournalentryshowsbothsidesofthetransactionwiththenameoftheACCOUNTSandtheirrespectivedebitorcredit.OnJan2,thefirmissues10,000sharesofcommonstockfor$100,000cashOnJan5,itpays$60,000cashtopurchaseequipmentGENERALJOURNALToyCorp.Page01DateDescriptionPost.Ref.DebitCreditJan.2Cash100,000CommonStocks100,000Jan.5Equipment60,000Cash60,0007ToyExampleToy’stransactionsforJanuary2002areasfollows:1)Jan2-Thefirmissues10,000sharesofcommonstocksfor$100,000cash.2)Jan5-Pays$60,000cashtopurchaseequipment.3)Jan15-Purchasesmerchandiseinventorycosting$15,000fromsupplieronaccount.4)Jan21-Payssupplierin(3)$8,000oftheamountdue.5)Jan28-Thefirmborrows$30,000fromabank.6)Jan31-Thefirmsreceives$3,000fromacustomerforagoodtobedeliveredinMarch.8100,000(1)CASH(A)(1)100,000COMMONSTOCK(OE)Transaction1Assets=Liabs.+OE+100,000(cash)=+100,000(commonstock)LedgerPostingProcedure-UsingT-AccountsDateDescriptionPost.Ref.DebitCreditJan.2Cash100,000CommonStocks100,000JournalEntriesT-Accounts9(2)60,000CASH(A)(1)100,00060,000(2)EQUIPMENT(A)Transaction2Assets=Liabs.+OE-60,000(cash)+60,000(equipment)=LedgerPostingProcedure-UsingT-AccountsDateDescriptionPost.Ref.DebitCreditJan.5Equipment60,000Cash60,000JournalEntriesT-Accounts1015,000(3)INVENTORY(A)(3)15,000ACC.PAYABLE(L)Transaction3Assets=Liabs.+OE+15,000(inventory)=+15,000(acc.payable)LedgerPostingProcedure-UsingT-AccountsDateDescriptionPost.Ref.DebitCreditJan.15Inventory15,000AccountsPayable15,000JournalEntriesT-Accounts11(4)8,00015,000(3)CASH(A)(1)100,00060,000(2)8,000(4)ACC.PAYABLE(L)Transaction4Assets=Liabs.+OE-8,000(cash)=-8,000(acc.payable)LedgerPostingProcedure-UsingT-AccountsDateDescriptionPost.Ref.DebitCreditJan.21AccountsPayable8,000Cash8,000JournalEntriesT-Accounts1230,000(5)CASH(A)(1)100,00060,000(2)(5)30,0008,000(4)LOANPAYABLE(L)Transaction5Assets=Liabs.+OE+30,000(cash)=+30,000(loanpayable)LedgerPostingProcedure-UsingT-AccountsDateDescriptionPost.Ref.DebitCreditJan.28Cash30,000LoanPayable30,000JournalEntriesT-Accounts133,000(6)CASH(A)(1)100,00060,000(2)(5)30,0008,000(4)(6)3,000ADV.CUSTOMERS(L)Transaction6Assets=Liabs.+OE+3,000(cash)=+3,000(adv.customers)LedgerPostingProcedure-UsingT-AccountsDateDescriptionPost.Ref.DebitCreditJan.28Cash3,000Adv.fromCustomers3,000JournalEntriesT-Accounts14T-AccountsandBalanceSheetasatJan31,2002(1)100,00060,000(2)(5)30,0008,000(4)(6)3,000Bal.65,000CASH(A)ADV.CUSTOMERS(L)LOANPAYABLE(L)3,000(6)3,000Bal.30,000(5)30,000Bal.EQUIPMENT(A)INVENTORY(A)(3)15,000Bal.15,000(2)60,000Bal.60,000COMMONSTOCK(OE)100,000(1)100,000Bal.ACC.PAYABLE(L)(4)8,00015,000(3)7,000Bal.BalanceSheetASSETSCurrentsAssetsCash65,000Inventory15,000PPEEquipment60,000TotalAssets140,000LIABILITIESANDOECurrentLiabilitiesAccountsPayable7,000AdvfromCustomers3,000Long-termLiabilitiesLoanPayable30,000TotalLiabilities40,000OWNERS’EQUITYCommonStock100,000TotalLiabilitiesandOE140,00015THETRIALBALANCE•Alistingofallaccountswiththeirrelatedbalances.•Ittestswhetherdebitsandcreditsareequal.CASH(A)65,000INVENTORY(A)15,000EQUIPMENT(A)60,000ACCOUNTSPAYABLE(L)7,000ADVANCESFROMCUSTOMERS(L)3,000LOANPAYABLE(L)30,000COMMONSTOCK(OE)100,000TOTAL140,000140,000BALANCEACCOUNTTITLESDEBITCREDITTRIALBALANCETOYCORPORATIONASATJAN31,200216AccrualBasisVs.CashBasisAccrualBasisRevenuesarerecognizedwhenearnedandexpensesarerecognizedwhenincurred.CashBasisRevenuesarerecognizedwhencashisreceivedandexpensesrecordedwhencashispaid.•Intuitiveandeasy.•Providesinformationontheliquidity•Subjecttomanipulation,forexample,thefirmcandelayhavingtorecognizeanexpensebypostponingcashpayment.•Moredifficultconceptually.•Providesinformationonlong-termprofitability.•Subjecttomanipulationbythechoiceofrecognitionrules17RealizationPrincipleMatchingPrincipleFundamentalPrinciplesforIncomeMeasurementTellsuswhentorecognizeRevenuesTe