基础会计学四单元英文版.pptVIP

Recall our salary accrual at December 31, 2013, for our one employee. The adjusting entry was to debit Salaries Expense and credit Salaries Payable for $210. If we do not use reversing entries, there will be no entry on January 1, 2014. Instead, the next entry will be made when salary is paid on January 9, 2014. If we elect to use reversing entries, an entry on January 1, 2014 is necessary. We will reverse the accrual made at the end of 2013, with a debit to Salaries Payable and a credit to Salaries Expense for the amount of the accrual of $210. Notice that on January 1, 2014, we have an abnormal balance in the Salaries Expense account. The expense account has a credit balance of $210. Now let’s move on to January 9, 2014, the next payday, and look at the journal entry to record the payment to our employee. When we were preparing adjusting entries we did not make reversing entries. As a result, we had a rather complex journal entry to record the payment of payroll and recording the proper payroll expense in 2014. The journal entry we made was to debit Salaries Expense for $490 (the amount actually earned by the employee in 2014), debit Salaries Payable for $210 (resulting from our adjusting entry) and credit cash for $700. Some bookkeepers may forget to eliminate the salaries payable account when recording the payroll and this will cause an error to occur in 2014. If we elected to use reversing entries, we made the January 1, 2014 entry, and on the payday we will merely debit Salaries Expense for $700 and credit Cash for the same amount. Remember, salaries expense started the year with an abnormal credit balance of $210, the salaries expense for 2014 is equal to $490 ($700 less $210 credit balance). End of Chapter 4. The adjusted trial balance is prepared by combining the adjustments with the unadjusted balances for each account. As an example, the Prepaid Insurance account has a $2,400 debit balance in the Unadjusted Trial Balance columns. This $2,400 debit i