Accounting Record

8/9/2019 Accounting Record

1/22

WELCOME BACK!

TO

LANGUAGE OFBUSINESS


2/22

ACCOUNTING RECORDS &

SYSTEMS


3/22

FINANCIAL STATEMENTS

• THE PREPARATIONOF F/S IS NOT THEFIRST STEP IN THEACCOUNTINGPROCESS, …


4/22

INANCIAL

IN ORMATIO

N

BALANCE SHEET

INCOME STATEMENT

CASHFLOW

FUNDS FLOW

TASKS

IDENTIFY

COLLECT

MEASURE

ANALYZE

COMMUNICATE

ECONOM C

ENT T ES

CORPORATIONS

PARTNERSHIPS

PROPRIETORSHIP

ACT V T ES

INVESTING

FINANCING

OPERATING

EXTERNAL

POTENTIAL INVESTORS

SUPPLIERS

CREDITORS

CUSTOMERS

COMPETITORS

GOVERNMENT

GENERAL PUBLIC

NTERNAL

STOCKHOLDERS

MANAGERS

EMPLOYEES

ACCOUNTING SPECTRUM

PROCESS OUTPUTS SUBJECTS

JECTS


5/22

1. Transaction Occurs

2. Journalizing

Transactions are

entered in a general

journal.

3. Posting

Journal entries are

transferred to ledger

accounts.

4. Trial Balance

Accounts are verified,

totaled and balanced.

5. Accounting Adjustments

Adjustments are made in order to

prepare financial statements.

6. Closing ntries

Clear and close revenue and

expense accounts, transfer to

statements.

!. "ra#t $inancial

%tatements

Balance sheet, income

statement and cash flow

are prepared.

&. Closing

Books are prepared for

next ccle.


6/22

FINANCIAL STATEMENTS

• ACCOUNTING CYCLE: TRACKING THECOMPANY’SLIFECYCLE


7/22

ACCOUNTING CYCLE• THE CHART OF ACCOUNTS: ACOLLECTION OF BUCKETS AS YOU GO

ALONG• THE GENERAL JOURNAL: THE HISTORYBOOK

• THE GENERAL LEDGER: TRACING THE

CHANGES (INCREASE OR DECREASE) INTHE BUCKETS

• TRIAL BALANCE: BALANCING THEBUCKETS


8/22


9/22

ANALYSIS OF ACCOUNTINGTRANSACTIONS

ACCO'(T "e)it Credit

A!!"T! #ncreases $ecreases

%#AB#%#T#"! $ecreases #ncreases

"&'#T#"! $ecreases #ncreases(")"*'"! $ecreases #ncreases

"+"*!"! #ncreases $ecreases

ACCO'(T BA*A(C% A!!"T! $ebit

%#AB#%#T#"! Credit

"&'#T#"! Credit


10/22

JOURNALIZING

T'$ .#"c$ ") #$c"#0in( t'$ 0$it an0c#$0it c'#"n"*"(ica**! 60a! ! 0a!3 in a ""7 ")"#i(ina* $nt#! ca**$0 t'$ 8"+#na* i ca**$0 journalizing. In

it i1.*$t )"#1at, t'$ 8"+#na* i c"1."$0 "n*! ") t-"1"n$! c"*+1n .*ac$0 i0$ ! i0$2 It 1+t $#$(it$#$0 -it' t'$ 9+#$a+ ") Int$#na* R$$n+$ $)"#$t'$ ""77$$.$# $(in 1a7in( $nt#i$ int" it2

A co!"#t# $o%rna" #ntr& contains t'# (o""o)in*:2 Dat$

;2 T'$ acc"+nt tit*$/ an0 t'$ a1"+nt/ t" $ 0$it$0


11/22

GENERAL >OURNAL

• A *itin( ") a** t#anacti"n in c'#"n"*"(ica* "#0$#

• 4 9""7 ") "#i(ina* $nt#!

• A #$c"#0 ") 0$it an0 c#$0it $nt$#$0 inc"*+1n,

t'$ *$)t c"*+1n )"# #$c"#0in( 0$it

t'$ #i('t c"*+1n )"# #$c"#0in( c#$0it

GENERAL >OURNAL$ate Account Title and "xplanation (ef *um $ebit Credit


12/22

T-ACCOUNT

Acc"+nt Tit*$

"e)it Credit

Journal ntr+

-ow transactions are entered into the accounting sstem.


13/22

SAMPLE CHART OF

ACCOUNTS• Ass#ts? Ca'

?; R$$#$

?


14/22

SAMPLE CHART OF

ACCOUNTS• E5+it!


15/22

SAMPLE CHART OF

ACCOUNTS E.$n$

? Int$#$t Pai0 "n S'"#t@t$#1 "##"-in(

?; Int$#$t Pai0 "n C*i$nt Sain(?


16/22

• R$.#$$nt t'$ acc+1+*ati"n ") a**in)"#1ati"n a"+t c'an($ in an a$t,

*iai*it!, $5+it!, #$$n+$ "# $.$n$ it$1in "n$ .*ac$2

•

Eac' *$0($# acc"+nt i i0$ntiB$0 ! itacc"+nt na1$ an0 n+1$# a tat$0 "nt'$ C'a#t ") Acc"+nt2


17/22

LEDGER ACCOUNTS

$ate "xplanation $ebit Credit Balance

Jul

/

0/1,213

$i,ed Assets Account (o. 116

urchased computer

urchased motorccles

0/3,213

034,213

3,111

2,111


18/22

POSTING• T'$ 8"+#na* .#"i0$ a c"1.*$t$ #$c"#0in( ") t'$ 0ai*!

t#anacti"n ") a +in$2 H"-$$#, it 0"$ n"t '"- in"n$ .*ac$ "# in "n$ (*anc$ a** t'$ c'an($ 6inc#$a$ "#

0$c#$a$3 t'at t""7 .*ac$ )"# a .a#tic+*a# acc"+nt2• T" 1a7$ t'i ."i*$, t'$ 0$it an0 c#$0it '"+*0 $

#$-#itt$n )#"1 t'$ ($n$#a* 8"+#na* t" t'$ ($n$#a* *$0($#2 T'$ .#"c$ ") #$-#itin( i ca**$0 posting.

• T'$ tan0a#0 )"#1 ") t'$ *$0($# 'a t-" i0$, t'$

,#+it si,# an0 t'$ cr#,it si,#2 In it i1.*$t )"#1at, iti a T@acc"+nt2 Eac' i0$ 'a a 0at$ c"*+1n, $.*anati"n,)"*i" an0 a1"+nt c"*+1n2 9$)"#$ ."tin(, t'$ *$0($#acc"+nt a#$ ".$n$0 a$0 "n a c'a#t ") acc"+nt2


19/22

TRIAL ALANCE

• A)t$# a** t#anacti"n )"# t'$ .$#i"0 'a$ $$n."t$0 t" t'$ *$0($# acc"+nt, t'$ a*anc$ )"# $ac'acc"+nt i 0$t$#1in$0 -'ic' i $it'$# a 0$it "# ac#$0it2

• T'$ trial balance i t'$ *it ") a** acc"+nt an0 t'$i#a*anc$ an0 c'$c7 -'$t'$# t"ta* 0$it $5+a*t"ta* c#$0it2


20/22

ADJUSTING ENTRIES.Entri#s r#/%ir#, at t'# #n, o( #ac'acco%ntin* !#rio, to %!,at# t'# acco%nts asn#c#ssar& an, to (%""& r#co*ni0#1 on an

accr%a" +asis1 r#2#n%#s an, #3!#ns#s (or t'#!#rio,45

S6o%s#n1 Stic#1 Stic#


21/22

ADJUSTING ENTRIES

• 7r#!a&#nts

• D#(#rr#, Inco#

• Accr%#, Inco#• Accr%#, E3!#ns#s

• Do%+t(%" Acco%nts

• D#!r#ciation


22/22

CLOSING ENTRIES

• ar# #ntri#s t'at r#,%c# a"" r#2#n%# an,#3!#ns# acco%nts to a 0#ro +a"anc# at t'# #n,o( #ac' acco%ntin* !#rio,1 an, trans(#rrin*

t'# !r#c"os#, +a"anc#s to t'# t'# r#tain#,#arnin*s acco%nt4

Documents

Accounting Record