Kế toán, kiểm toán - Chapter 1: Recording business transactions

International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 1 INTRODUCE MINISTRY OF INDUSTRY AND TRADE INDUSTRIAL UNIVERSITY OF HO CHI MINH CITY FACULTY OF ACCUONTING-AUDITING MA.Nguyen Quoc Nhat 1 INTRODUCE 2 • Code modules: 2127407 • Credits: 3 • Texbook: • Reference material: - Accounting, Charles T. Horngren, Walter T. Harrison Jr. and M. Suzanne Oliver, 2012, Prentice hall. - PRINCIPLES OF ACCOUNTING Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2009. - Website: www.iasplus.com INTRODUCE 3 Learning objective: • Presenting the basic knowledge about accounting cycle from record economic transactions arising in their diary, to take notes on ledger, trial balance spreadsheet program, implementing adjustments. • Applying the knowledge to create a good platform for students to acquire academic accounting research deeper, higher. International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 2 INTRODUCE 4 Table of content: Chapter 1 RECORDING BUSINESS TRANSACTIONS 2 THE ADJUSTING PROCESS 3 COMPLETING THE ACCOUNTING CYCLE 4 MERCHANDISING OPERATIONS 5 MERCHANDISE INVENTORY 6 INTERNAL CONTROL AND CASH 7 RECEIVABLES 8 PLANT ASSETS AND INTANGIBLES 9 CURRENT LIABILITIES AND PAYROLL 10 LONG-TERM LIABILITIES, BONDS PAYABLE, AND CLASSIFICATION OF LIABILITIES ON THE BALANCE SHEET 11 CORPORATIONS: PAID-IN CAPITAL AND THE BALANCE SHEET 12 PARTNERSHIPS CHAPTER1: RECORDING BUSINESS TRANSACTIONS 5 Learning of objective:  Explain accounts, journals, and ledgers as they relate to recording transactions and describe common accounts  Define debits, credits, and normal account balances, and use double-entry accounting and T-accounts  List the steps of the transaction recording process Journalize and post sample transactions to the ledger  Prepare the trial balance from the T-accounts CHAPTER1: RECORDING BUSINESS TRANSACTIONS 6 Table of content: 1.1 The Account, the Journal, and the Ledger 1.2 Debits, Credits, and Double-Entry Accounting 1.3 List the Steps of the Transaction Recording Process 1.4 Journalizing Transactions and Posting to the Ledger 1.5 Preparing the Trial Balance from the T-Accounts International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 3 1.1 The Account, the Journal, and the Ledger 7 1.1.1 The Accounting Cycle (1) Identify and analyze transactions as they occur (2) Record transactions in a journal (3) Post (copy) from the journal to the ledger accounts (4) Prepare the unadjusted trial balance (5) Journalize and post adjusting entries (9) Prepare the post closing trial balance (8) Journalize and post alize an the closing entries (7) Prepare the financial statements (6) Prepare an adjusted trial balance Start with the balances in the ledger at the beginning of the period OPTIONAL: Worksheet 1.1 The Account, the Journal, and the Ledger 8 1.1.2 The Accounting Equation : Assets = Liabilities + Owner’s Equity 1.1 The Account, the Journal, and the Ledger 9 1.1.2 The Accounting Equation (continue) • An asset is any resource controlled by the business that has measurable value and is expected to provide future benefits. • A liability is a measurable amount that a business owes to a creditor. • Owner’s equity represents the owner’s claim to the business. International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 4 1.1 The Account, the Journal, and the Ledger 10 1.1.2 The Accounting Equation (continue) • A T-account is a quick way to show the effect of transactions on a particular account—a useful shortcut or tool used in accounting. T-accounts are not part of the formal accounting records. 1.2 Debits, Credits, and Double-Entry Accounting 11 1.2.1 Double-entry accounting The T-acount: The form of account used for most illustrations in this book is called the T-account because it takes the form of the capital letter “T.” (left side) Debit (right side) Credit cash 1.2 Debits, Credits, and Double-Entry Accounting 12 1.2.1 Double-entry accounting (continue) The type of an account (asset, liability, owner’s equity) determines how we record increases and decreases. For any given type of account, all increases are recorded on one side, and all decreases are recorded on the other side. Increases in assets are recorded in the left (debit) side of the account. Decreases in assets are recorded in the right (credit) side of the account. Conversely, increases in liabilities and owner’s equity are recorded by credits. Decreases in liabilities and owner’s equity are recorded by debits . International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 5 1.2 Debits, Credits, and Double-Entry Accounting 13 1.2.1 Double-entry accounting (continue) Revenues are increases in owner’s equity from providing goods and services to customers. Expenses are decreases in owner’s equity from using assets or increasing liabilities in the course of operating the business. 1.3 List the Steps of the Transaction Recording Process 14 1.4 Journalizing Transactions and Posting to the Ledger 15 Learning objective: • Record transactions in the journal • Post from the journal to the ledger International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 6 1.4 Journalizing Transactions and Posting to the Ledger 16 Learning objective: • Record transactions in the journal • Post from the journal to the ledger 1.4 Journalizing Transactions and Posting to the Ledger 17 Date of the transaction (from invoice) Enter the account number Debit account name and dollar amount. Debits are always listed first. Credit account name and dollar amount. The credit account name is indented. Brief explanation 1.4 Journalizing Transactions and Posting to the Ledger 18 Transfer the date of the transaction from the journal to the ledger. Transfer the page number from the journal to the journal reference column of the ledger. Post the debit figure from the journal as a debit figure in the ledger account. Enter the account number in the posting reference column of the journal once the figure has been posted to the ledger. International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 7 19 20 1.4 Journalizing Transactions and Posting to the Ledger 21 Transactions of Hoa Hong in june 2016: 1. 6/1 The owner invested $100,000 cash. 2. 6/8 Purchase Truck costing $20,000 with $5,000 cash and a Note payable for $15,000. International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 8 1.4 Journalizing Transactions and Posting to the Ledger 22 Transaction 1: 6/1 The owner invested $100,000 cash. 1.4 Journalizing Transactions and Posting to the Ledger 23 Transaction 1: 6/1 The owner invested $100,000 cash. 1.4 Journalizing Transactions and Posting to the Ledger 24 Transaction 1: 6/1 The owner invested $100,000 cash. Cash (1) $100,000 Capital Stock $100,000 (1) International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 9 1.4 Journalizing Transactions and Posting to the Ledger 25 Transaction 2: 6/8 Purchase Truck costing $20,000 with $5,000 cash and a Note payable for $15,000. 1.4 Journalizing Transactions and Posting to the Ledger 26 Transaction 2: 6/8 Purchase Truck costing $20,000 with $5,000 cash and a Note payable for $15,000. 1.4 Journalizing Transactions and Posting to the Ledger 27 Transaction 2: 6/8 Purchase Truck costing $20,000 with $5,000 cash and a Note payable for $15,000. International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 10 1.5 Preparing the Trial Balance from the T-Accounts 28 Learning objective: Prepare and use a trial balance 1.5 Preparing the Trial Balance from the T-Accounts 29 1.5.1 The concept of trial balance. A trial balance summarizes the ledger by listing all accounts with their balances-assets first, followed by liabilities, and then owner’s equity. Before computers, the trial balance provided an accuracy check by showing whether the total debits equalled the total credits. The trial balance is still useful as a summary of all the accounts and their balances. A trial balance may be created at any time the postings are up to date. The most common time is at the end of the accounting period. 1.5 Preparing the Trial Balance from the T-Accounts 30 HOA HONG Co., Ltd Unadjusted Trial Balance June 30, 2016 Account Number Account Balance Debit Credit Total 1.5.2 Method of trial balance. International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 11 31 32 33 International Accounting Chapter 1: Recording Business Transactions MA. Nguyen Quoc Nhat –nhatnq.faa@gmail.com 12 34 35