财务会计-FinancialAccounting3-AdelphiUniversity-SamYang.pptVIP

Chapter 3 Adjusting Accounts and Preparing Financial Statements The Accounting Period Accrual Basis vs. Cash Basis Accrual Basis vs. Cash Basis Accrual Basis vs. Cash Basis Recognizing Revenues Expenses Revenue Recognition Recognizing Revenues Expenses Revenue Recognition Matching Adjusting Accounts Adjusting Prepaid (Deferred) Expenses Prepaid Insurance On December 1, 2007, Scott Company paid $12,000 for insurance for December 2007 through May 2008. Scott recorded the expenditure as Prepaid Insurance on December 1. What adjustment is required? Supplies During 2007, Scott Company purchased $15,500 of supplies. Scott recorded the expenditures as Supplies. On December 31, a count of the supplies indicated $2,655 on hand. What adjustment is required? Adjusting for Depreciation Depreciation is the process of computing expense from allocating the cost of plant and equipment over their expected useful lives. Adjusting for Depreciation On January 1, 2007, Barton, Inc. purchased equipment for $62,000 cash. The equipment has an estimated useful life of five years and Barton expects to sell the equipment at the end of its life for $2,000 cash. Let’s record depreciation expense for the year ended December 31, 2007. Adjusting for Depreciation Adjusting for Depreciation Adjusting for Depreciation Adjusting Unearned (Deferred) Revenues Adjusting Unearned (Deferred) Revenues On October 1, 2007, Ox University sold 1,000 season tickets to its 20 home basketball games for $100 each. Ox University makes the following entry: Adjusting Unearned (Deferred) Revenues On December 31, Ox University has played 10 of its regular home games, winning two and losing eight. Adjusting for Accrued Expenses Adjusting for Accrued Expenses Adjusting for Accrued Expenses Adjusting for Accrued Revenues Adjusting for Accrued Revenues Links to Financial Statements  Preparing Financial Statements Let’s use FastForward’s adjusted trial balance to prepare the company’s financial