Kế toán, kiểm toán - Chapter 3: Adjusting accounts and preparing financial statements

Financial and Managerial AccountingWild, Shaw, and ChiappettaFourth Edition McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter 3Adjusting Accounts and Preparing Financial StatementsConceptual Chapter ObjectivesC1: Explain the importance of periodic  reporting and the time period  assumption.C2: Explain accrual accounting and how  it improves financial statements.C3: Identify steps in the accounting cycle.C4: Explain and prepare a classified  balance sheet.3-*Analytical Chapter ObjectivesA1: Explain how accounting adjustments  link to financial statements.A2: Compute profit margin and describe  its use in analyzing company  performance.A3: Compute the current ratio and  describe what it reveals about a  company’s financial condition.3-*Procedural Chapter ObjectivesP1: Prepare and explain adjusting entries.P2: Explain and prepare an adjusted trial balance.P3: Prepare financial statements from an adjusted trial balance.P4: Describe and prepare closing entries.P5: Explain and prepare a post-closing trial balance.3-*Procedural Chapter Objectives (Continued)P6: Appendix 3A – Explain the alternatives in accounting for prepaids (see text for details).P7: Appendix 3B – Prepare a work sheet and explain its usefulness (see text for details).P8: Appendix 3C – Prepare reversing entries and explain their purpose (see text for details).3-*Adjustments An adjusting entry is recorded to bring an asset or liability account balance to its proper amount.Adjusting AccountsPaid (or received) cash before expense (or revenue) recognizedPaid (or received) cash after expense (or revenue) recognizedPrepaid (Deferred) expenses*Unearned (Deferred) revenuesAccruedexpensesAccruedrevenuesFramework for Adjustments*including depreciationC2, P13-*Links to Financial StatementsA13-*Finally, the totals are determined.FastForward – Computing the Adjusted Trial Balance - December 31, 2011P23-*Prepare Income StatementP33-*Prepare Statement of Retained EarningsNote that net income from the Income Statement carries to the Statement of Retained Earnings.P33-*Prepare Balance SheetP33-*Recording Closing EntriesClose revenue accounts.Close expense accounts.Close income summary account.Close dividends account.P43-*The Accounting CycleStart1. Analyzetransactions2. Journalize3. Post4. Prepareunadjustedtrial balance5. Adjust6. Prepareadjustedtrial balance7. Preparestatements8. Close9. Preparepost-closingtrial balanceC310. Reverse (optional)3-*End of Chapter 33-*