会计英语7 week8 closing entry

AccountingEnglishweek8Spring2013PreparetheIncomeStatement*Single-StepIncomeStatementLO2Prepareasingle-stepincomestatement.Thesingle-stepstatementconsistsofjusttwogroupings:RevenuesExpensesNetIncomeSingle-StepNodistinctionbetweenOperatingandNon-operatingcategories.Separatesoperatingtransactionsfromnonoperatingtransactions.Matchescostsandexpenseswithrelatedrevenues.Highlightscertainintermediatecomponentsofincomethatanalystsuse.LO3Prepareamultiple-stepincomestatement.Multiple-StepIncomeStatementBackgroundMultiple-StepIncomeStatementLO3Prepareamultiple-stepincomestatement.Thepresentationdividesinformationintomajorsections.1.OperatingSection2.NonoperatingSection3.IncometaxPrepareStatementofRetainedEarningsNote:NetIncomefromtheIncomeStatementcarriestotheStatementofRetainedEarnings.*PrepareBalanceSheet*3.5closingentriesKeytermsRealaccount实账户Nominalaccount虚账户Closingentry结账分录Closingaccount结账账户Incomesummary收益汇总（本年利润）*TemporaryandPermanentAccounts*Temporary(nominal)accountsaccumulatedatarelatedtooneaccountingperiod.Theyincludeallincomestatementaccounts,thedividendsaccount,andtheIncomeSummaryaccount.Theseaccountsare“closed”attheendoftheperiodtogetreadyforthenextaccountingperiod.Permanent(real)accountsreportactivitiesrelatedtooneormorefutureaccountingperiods.Theycarryendingbalancestothenextaccountingperiodandarenot“closed.”ClassexercisesChoice()ofthefollowingaccountsarerealaccountsA.cashinbankB.accountreceivableC.accountpayableD.servicerevenueE.salaryexpenseF.inventoryTrueorfalse1.Thebalanceofrealaccountswouldbeclosedtoowner’sequityviaclosingentries.2.Normally,thebalanceintheincomesummaryafterclosingtherevenuesandexpensesmustequalthenetincomeornetloss.*ABCFXVRecordingClosingEntries*Closerevenueaccounts.Closeexpenseaccounts.Closetheincomesummaryaccount.Closedividendsaccount.RecordingClosingEntriesP&L(income)SummarySalariesExpensesConsultingRevenues$18,100$25,000RetainedEarnings$7,000Examinetheaccountspresented.*$25,000CloserevenueswithadebittotherevenueaccountandacredittoIncomeSummary.RecordingClosingEntries$18,100SalariesExpensesConsultingRevenuesIncomeSummary$25,000$25,000*$25,000$25,000CloseexpenseaccountswithacredittoexpensesandadebittoIncomeSummary.$25,000RecordingClosingEntries$18,100SalariesExpensesConsultingRevenuesIncomeSummary$18,100$18,100*$18,100$25,000$18,100$25,000$25,000$18,100DeterminethebalanceintheIncomeSummaryaccount.RecordingClosingEntriesSalariesExpensesConsultingRevenuesIncomeSummary$6,900*$18,100$25,000$18,100$18,100$7,000ClosetheIncomeSummarytoRetainedEarnings.RecordingClosingEntries$6,900SalariesExpensesIncomeSummaryRetainedEarnings$6,900$6,900*RecordingClosingEntriesDividends$2,000$7,0006,900RetainedEarningsThedividendsaccountisclosedtoRetainedEarnings.$2,000$2,000*RecordingClosingEntriesDividends$2,000$2,000$2,000DeterminetheendingbalanceinRetainedEarnings.$11,900$7,0006,900RetainedEarningsThedividendsaccountisclosedtoRetainedEarnings.*3.6PostClosingTrialBalanceTrialBalancepreparedaftertheclosingentrieshavebeenposted.Thepurposeistoinsurethatallnominalortemporaryaccountshavebeenclosed.Theonlyaccountsonthistrialbalanceshouldbeassets,liabilities,andequityaccounts.*3.7TheAccountingCycleStartAnalyzetransactionsJournalizePostPrepareunadjustedtrialbalanceAdjustPrepareadjustedtrialbalancePreparestatementsClosePreparepost-closingtrialbalanceReverse(optional)Exercise3-5*Translatetheitemsfirst,andthenshowtheanswer.*Self-TestQuestionsTranslatethequestionsfirst,andthenpointoutthecorrectoptionwithaclearreason.3.8classificationofB/SitemsAccountswithsimilarcharacteristicsaregroupedtogetheronthebalancesheet.Categoriesofaccounts:1.Assets2.Liabilities3.Owner’sequity*1.AssetsResourceswithfutureeconomicbenefittoabusinessentityasaresultofapasttransactionCurrentassets:Cashandotherassetsthatarereasonablyexpectedtoberealizedincashorsold,orconsumedwithinoneyearorthecompany’soperatingcycle,whicheverislonger.(i.e.,cash,A/R,inventory,prepaidexpenses.).Operatingcycle:营业周期Workingcapital:营运资本Workingcapital=C.A.-C.L*1.Assets(contd.)long-terminvestment:land,buildingheldforfutureuse;securitiesheldasalong-terminvestment(shares,bonds,long-termN/R).Property,plant,andequipment(Fixedassets):assetsusedinfirms'operationsandmeetthefollowingcriteria:Economiclife>1year.Acquiredforuseinoperation.Notforresaletocustomers.$ismaterial.Depreciationisapplied.*1.Assets(contd.)d.Intangibleassets:Assetswithnophysicalsubstancebuthavevaluebasedonrightsorprivilegesthatbelongtotheowner(i.e.,patents,franchises,trademarks,…)e.Otherassets:Deferredcharges(long-termprepayments)*TrueorFalse?1.Inventoryisexpectedtobesoldorconsumedwithinonyearoroneoperatingcycle.2.Notesreceivablebelongtocurrentasset.3.Iftotalcurrentassets=$1000,andtotalcurrentliabilities=$1200,thenworkingcapital=$200.4.Trademark’seconomiclifeisshorterthanoneyear.5.Goodwill,copyright,patentsandbondsareallintangibleassets.*XXXX2.LiabilitiesLegalobligationsrequiredfuturepaymentsofassetsorservicesasaresultofabusinessentity’spasttransactionsorevents.a.Currentliabilities:Obligationsmustbefulfilledinoneyearoroneoperatingcycle,whicheverislonger.Willrequiretheuseofcurrentassetsorthecreationofcurrentliability.*2.Liabilities(contd.)b.Long-termliabilities:Obligationsarenotdueinnextyearornextoperatingcycle,whicheverislonger.c.Otherliabilities:Long-termadvancesfromcustomers,deferredincometaxes.*3.owner’sequityDiffersfordifferentformsofbusinessownership.Forcorporateform,thenameisshareholders’equity.a.Contributedcapital(Legalcapital):includesParvalueofcommonstock,parvalueofpreferstockandpaid-incapitalinexcessofparvalueofcommonstockorpreferredstock.b.RetainedEarnings(ordeficit):incomenotdistributedtostockholders*3.9PracticeinChinaBookkeepingprocedure.1,vouchersarerecordedbythesourcedocumentsorsummarizedsourcedocuments;2,cashjournalandcashinbankjournalarerecordedbythereceiptvouchersandpaymentvouchers.3,subsidiaryledgersarerecordedbythesourcedocuments,summarizedsourcedocumentsandvouchers.4,generalledgerisrecordedbyvouchers.5,checkbalances.cashjournal,cashinbankjournalandsubsidiaryledgersvs.generalledger.6,financialstatementsareprepared.*TrueorFalse?Receiptvouchersandpaymentvouchersarerecordedbycashjournalandcashinbankjournal.Forthecorporateformofcompany,retainedearningsrepresentsoriginalamountspaidbyshareholders.Noncurrentliabilitiesarenotdueinnextyearornextoperatingcycle,*XXCurrentRatioCurrentRatio=CurrentAssetsCurrentLiabilities1.Thisratiomeasuresthecompany’sabilitytopaycurrentliabilitieswithcurrentassets.2.Usersofthisratios:creditor,stockholders,andmanagers(whomustmaintainenoughcashtopaythecompany’scurrentliabilities).*Classexercise1.Thecollectionofanaccountreceivable()Increasesassetsandincreasesowner’sequity.Increasesassetsanddecreasesassets.Decreasesassetsanddecreasesowner’sequity.Decreasesassetsandincreasesliabilities. 2.Owner’sequityisaffectedby()Collectionofaccountsreceivable.Withdrawalbytheownerofcashforpersonalexpenses.Purchaseofanassetforcash.Paymentofaliability.*Classexercise3.Therecognitionissueconcerns()Wheretorecordabusinesstransaction.Howtoclassifyabusinesstransaction.Whentorecordabusinesstransaction.Assigningadollaramounttoabusinesstransaction.4.Whichofthefollowingaccountsisanasset?UnearnedInsuranceFeesInsurancePayableInsuranceExpensePrepaidInsurance*Classexercise5.GroppCompanyacceptsanadvancefeeof$200forservicestobeprovidednextyear.Theentrytorecordthistransactionwouldincludea().CredittoCash.DebittoAccountsReceivable.CredittoUnearnedServiceFees.CredittoServiceFeesEarned.*Classexercise6.Astimepasses,theaccumulateddepreciationandthecarryingvaluerelatedtoaplantasset().Bothdecrease.Bothincrease.Increaseanddecrease,respectively.Decreaseandincrease,respectively.7.Whichofthefollowingisanexampleofanaccrual?CommissionearnedbutnotyetrecordedCommissioncollectedbutnotyetearnedDepreciationofanassetRecordingacashsale*Classexercise8.AdjustingentriesmustbemadeattheendoftheaccountingperiodforallofthefollowingsituationsexceptwhenThereareunrecordedexpenses.Thereareunrecordedrevenues.Revenueshavebeenrecordedthatmustbeapportionedbetweentwoormoreaccountingperiods.Thereareerrorstobecorrected.*Classexercise9.Whichofthefollowingaccountsisnotclosedduringtheclosingprocedure?B.Bailey,CapitalIncomeSummaryRentExpenseInterestIncome10.Thepost-closingtrialbalanceincludeswhichofthefollowing?NominalaccountsonlyRealaccountsonlyAllaccountslistedinthechartofaccountsBotha.andb.*