Chapter03 Accounting Cycle (II) Adjustments, Work Sheet and Financial Statements基础会计英文版概要1.pptVIP

Chapter 03 Accounting Cycle (II): Adjustments, Work Sheet and Financial Statements The Work Sheet Work sheet: a chart that provides necessary data for recording adjusting entries and for preparing such financial statements as the income statement and the balance sheet. The Work Sheet Placement of Accounts in the Work Sheet First, enter the balances of the ledger accounts in the first two columns of the work sheet. The updated ledger account balances are entered in the Adjusted Trial Balance columns. Second, The revenue and expense accounts are placed in the Income Statement columns. Third, The Balance Sheet columns will include Assets, Liabilities, and Owner’s Equity. (Drawing in the Debit side) Placement of Accounts in the Work Sheet The Adjustments Adjustments: internal transactions that bring the ledger accounts up to date at the end of an accounting period. Only a few accounts require adjusting. Take Guangli Services as an example (only four accounts need adjusting: Prepaid Insurance, Trucks, Equipment, and House). Adjustment for Prepaid Insurance Guangli Services has paid 3 600 yuan in advance for a one-year insurance policy on the trucks and equipment. Now one month has passed, the premium for January has now expired, which amounts to 300 yuan (3 600 yuan divided by 12 months). T accounts of the adjustments: Adjustments for Depreciation of Trucks Suppose Guangli Services believes that the trucks will have a useful life of ten years, with an estimated salvage value of 30 000 yuan at the end of the tenth year and the cost of the trucks 240 000 yuan. So the depreciation for one month is: Adjustments for Depreciation of Trucks In the work sheet, Guangli Services records the depreciation of 1 750 yuan as a debit to Depreciation Expense: Trucks and a credit to Accumulated Depreciation: Trucks Accumulated Depreciation: the total depreciation of the asset since it was originally purchased. T accounts for adjusting the depreciation of Trucks: Adjustments for