[其它]会计学horngren_acct7_ch03-03.pptVIP

The Adjusting Process Chapter 3 The Time Period Concept Requires that accounting information be reported at regular intervals Accounting Period Managers adopt an artificial period of time to evaluate performance Monthly Quarterly Semiannually Annually Objective 1 Distinguish accrual accounting from cash-basis accounting Accrual Basis Vs. Cash Basis Objective 2 Apply the revenue and matching principles Revenue Principle When is revenue recognized? When it is earned Not necessarily when cash is received The Matching Principle Measure all expenses incurred during the accounting period Expenses are recognized when the benefit from the expense is received. E 3 B O’Brien Industries collected $150,000 from customers in 2008. Of the amount collected, $30,000 was from revenue earned on account in 2007. In addition, O’Brien earned $47,000 of revenue in 2008, which will not be collected until 2009. O’Brien Industries also paid $100,000 for expenses in 2008. Of the amount paid, $30,000 was for expenses incurred on account in 2007. In addition, O’Brien incurred $44,000 of expenses in 2008, which will not be paid until 2009. Instructions (a) Compute 2008 cash-basis net income. (b) Compute 2008 accrual-basis net income. Objective 3 Make adjusting entries Adjusting Entries Prepared at end of an accounting period Recorded to bring an asset or liability account balance to its proper amount Recognize all revenues when earned Recognize all expenses incurred Adjusting Entries Five categories Prepaid expenses Depreciation Accrued revenues Accrued expenses Unearned revenues Adjusting Prepaid Expenses Resources paid for prior to receiving the actual benefits On April 1 you prepaid six months of rent, $3,000. Give your adjusting entry to record rent expense at April 30. Include the date of the entry and an explanation. Then post to the two accounts involved, and show their balances at April 30. S3-5 Adjusting for Depreciation Depreciation - process of allocating the cost