财务会计(英文版·原书第5版)ch03

Chapter3-1Chapter3-2CHAPTER3ADJUSTINGTHEACCOUNTSFinancialAccounting,SixthEditionChapter3-31.Explainthetimeperiodassumption.2.Explaintheaccrualbasisofaccounting.3.Explainthereasonsforadjustingentries.4.Identifythemajortypesofadjustingentries.5.Prepareadjustingentriesfordeferrals.6.Prepareadjustingentriesforaccruals.7.Describethenatureandpurposeofanadjustedtrialbalance.StudyObjectivesChapter3-4AdjustingtheAccountsTimingIssuesTheBasicsofAdjustingEntriesTheAdjustedTrialBalanceandFinancialStatementsTimeperiodassumptionFiscalandcalendaryearsAccrual-vs.cash-basisaccountingRecognizingrevenuesandexpensesTypesofadjustingentriesAdjustingentriesfordeferralsAdjustingentriesforaccrualsSummaryofjournalizingandpostingPreparingtheadjustedtrialbalancePreparingfinancialstatementsChapter3-5Generallyamonth,aquarter,orayear.Fiscalyearvs.calendaryearAlsoknownasthe“PeriodicityAssumption”TimingIssuesAccountantsdividetheeconomiclifeofabusinessintoartificialtimeperiods(TimePeriodAssumption).LO1Explainthetimeperiodassumption.Jan.Feb.Mar.Apr.Dec......Chapter3-6Thetimeperiodassumptionstatesthat:a.revenueshouldberecognizedintheaccountingperiodinwhichitisearned.b.expensesshouldbematchedwithrevenues.c.theeconomiclifeofabusinesscanbedividedintoartificialtimeperiods.d.thefiscalyearshouldcorrespondwiththecalendaryear.ReviewTimingIssuesLO1Explainthetimeperiodassumption.Chapter3-7Accrual-BasisAccountingTransactionsrecordedintheperiodsinwhichtheeventsoccur.Revenuesarerecognizedwhenearned,ratherthanwhencashisreceived.Expensesarerecognizedwhenincurred,ratherthanwhenpaid.TimingIssuesAccrual-vs.Cash-BasisAccountingLO2Explaintheaccrualbasisofaccounting.Chapter3-8Cash-BasisAccountingRevenuesarerecognizedwhencashisreceived.Expensesarerecognizedwhencashispaid.Cash-basisaccountingisnotinaccordancewithgenerallyacceptedaccountingprinciples(GAAP).TimingIssuesAccrual-vs.Cash-BasisAccountingLO2Explaintheaccrualbasisofaccounting.Chapter3-9RevenueRecognitionPrincipleTimingIssuesRecognizingRevenuesandExpensesLO2Explaintheaccrualbasisofaccounting.Companiesrecognizerevenueintheaccountingperiodinwhichitisearned.Inaserviceenterprise,revenueisconsideredtobeearnedatthetimetheserviceisperformed.Chapter3-10MatchingPrincipleTimingIssuesRecognizingRevenuesandExpensesLO2Explaintheaccrualbasisofaccounting.Matchexpenseswithrevenuesintheperiodwhenthecompanymakeseffortstogeneratethoserevenues.“Lettheexpensesfollowtherevenues.”Chapter3-11TimingIssuesLO2Explaintheaccrualbasisofaccounting.GAAPrelationshipsinrevenueandexpenserecognitionIllustration3-1Chapter3-12Oneofthefollowingstatementsabouttheaccrualbasisofaccountingisfalse.Thatstatementis:a.Eventsthatchangeacompany’sfinancialstatementsarerecordedintheperiodsinwhichtheeventsoccur.b.Revenueisrecognizedintheperiodinwhichitisearned.c.Theaccrualbasisisinaccordancewithgenerallyacceptedaccountingprinciples.d.Revenueisrecordedonlywhencashisreceived,andexpenseisrecordedonlywhencashispaid.ReviewTimingIssuesLO2Explaintheaccrualbasisofaccounting.Chapter3-13Adjustingentriesmakeitpossibletoreportcorrectamountsonthebalancesheetandontheincomestatement.Acompanymustmakeadjustingentrieseverytimeitpreparesfinancialstatements.TheBasicsofAdjustingEntriesLO3Explainthereasonsforadjustingentries.Chapter3-14Revenues-recordedintheperiodinwhichtheyareearned.Expenses-recognizedintheperiodinwhichtheyareincurred.Adjustingentries-neededtoensurethattherevenuerecognitionandmatchingprinciplesarefollowed.TheBasicsofAdjustingEntriesLO3Explainthereasonsforadjustingentries.Chapter3-15Adjustingentriesaremadetoensurethat:a.expensesarerecognizedintheperiodinwhichtheyareincurred.b.revenuesarerecordedintheperiodinwhichtheyareearned.c.balancesheetandincomestatementaccountshavecorrectbalancesattheendofanaccountingperiod.d.alloftheabove.ReviewTimingIssuesLO3Explainthereasonsforadjustingentries.Chapter3-16TypesofAdjustingEntriesDeferrals1.PrepaidExpenses.Expensespaidincashandrecordedasassetsbeforetheyareusedorconsumed.2.UnearnedRevenues.Cashreceivedandrecordedasliabilitiesbeforerevenueisearned.Accruals1.AccruedRevenues.Revenuesearnedbutnotyetreceivedincashorrecorded.2.AccruedExpenses.Expensesincurredbutnotyetpaidincashorrecorded.LO4Identifythemajortypesofadjustingentries.Chapter3-17TrialBalance–Eachaccountisanalyzedtodeterminewhetheritiscompleteandup-to-date.TrialBalanceLO4Identifythemajortypesofadjustingentries.PIONEERADVERTISINGAGENCYINC.TrialBalanceOctober31,2008AccountDebitCreditCash$15,200AdvertisingSupplies2,500PrepaidInsurance600OfficeEquipment5,000NotesPayable$5,000AccountsPayable2,500UnearnedRevenue1,200CommonStock10,000RetainedEarnings0Dividends500ServiceRevenue10,000SalariesExpense4,000RentExpense900$28,700$28,700Chapter3-18Deferralsareeither:PrepaidexpensesorUnearnedrevenues.AdjustingEntriesforDeferralsLO5Prepareadjustingentriesfordeferrals.Chapter3-19Paymentofcash,thatisrecordedasanassetbecauseserviceorbenefitwillbereceivedinthefuture.AdjustingEntriesfor“PrepaidExpenses”insurancesuppliesAdvertisingrentCashPaymentExpenseRecordedBEFORELO5Prepareadjustingentriesfo