专业英语会计学ppt课件.ppt

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1、THEACCOUNTINGCYCLE:ACCRUALSANDDEFERRALSChapter4LearningobjectivesWhyadjustmententryisneeded?Whatistypeofadjustingentry?Howtoadjusttransaction?MaterialityprincipleAttheendoftheperiod,weneedtomakeadjustingentriestogettheaccountsuptodateforthefinancialstatements.Adjustingentr

2、iesareneededwheneverrevenueorexpensesaffectmorethanoneaccountingperiod.Everyadjustingentryinvolvesachangeineitherarevenueorexpenseandanassetorliability.AdjustingEntriesConvertingassetstoexpensesAccruingunpaidexpensesConvertingliabilitiestorevenueAccruinguncollectedrevenues

3、TypesofAdjustingEntriesPriorPeriodsCurrentPeriodFuturePeriodsTransactionPaidcashinadvanceofincurringexpense(createsanasset).EndofCurrentPeriodAdjustingEntryRecognizesportionofassetconsumedasexpense,andReducesbalanceofassetaccount.ConvertingAssetstoExpensesExamplesInclud

4、e:DepreciationSuppliesExpiringInsurancePoliciesConvertingAssetstoExpensesJan.1Dec.31$2,400InsurancePolicyCoveragefor12Months$200MonthlyInsuranceExpenseOnJanuary1,WebbCo.purchasedaone-yearinsurancepolicyfor$2,400.ConvertingAssetstoExpensesInitially,coststhatbenefitmorethano

5、neaccountingperiodarerecordedasassets.ConvertingAssetstoExpensesThecostsareexpensedastheyareusedtogeneraterevenue.ConvertingAssetstoExpensesIncomeStatementCostofassetsusedthisperiodtogeneraterevenue.BalanceSheetCostofassetsthatbenefitfutureperiods.ConvertingAssetstoExpense

6、sDepreciationisthesystematicallocationofthecostofadepreciableassettoexpense.Depreciableassetsarephysicalobjectsthatretaintheirsizeandshapebutlosetheireconomicusefulnessovertime.TheConceptofDepreciationTheportionofanasset’sutilitythatisusedupmustbeexpensedintheperiodused.Ca

7、sh(credit)FixedAsset(debit)Ondatewheninitialpaymentismade...Theasset’susefulnessispartiallyconsumedduringtheperiod.Atendofperiod...DepreciationExpense(debit)AccumulatedDepreciation(credit)TheConceptofDepreciationOnMay2,2005,JJ’sLawnCareServicepurchasedalawnmowerwithauseful

8、lifeof50monthsfor$2,500cash.Usingthestraight-linemethod,calculatethemonthlydepreciationex