Chương 1 - KTUC - SV

INTRODUCE
MINISTRY OF INDUSTRY AND TRADE

INDUSTRIAL UNIVERSITY OF HO CHI MINH CITY • Code modules: 2127407
FACULTY OF ACCOUNTING-AUDITING • Credits: 3
• Texbook:
• Reference material:
INTRODUCE
- Accounting, Charles T. Horngren, Walter T. Harrison Jr. and M.
Suzanne Oliver, 2012, Prentice hall.
- PRINCIPLES OF ACCOUNTING Published by McGraw-Hill/Irwin,
a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of
the Americas, New York, NY, 10020. Copyright © 2009.
- Website: http://www.ifrs.org/IFRSs/Pages/IFRS.aspx
www.iasplus.com
MA.Nguyen Thi Ngoc Bich
1
2
Copyright © 2007 Prentice-Hall. All rights reserved Copyright © 2007 Prentice-Hall. All rights reserved
INTRODUCE
INTRODUCE
Table of content:
Learning objective:
Chapter
• Presenting the basic knowledge about accounting cycle 1 RECORDING BUSINESS TRANSACTIONS
from record economic transactions arising in their 2 THE ADJUSTING PROCESS (Nhóm 1)
diary, to take notes on ledger, trial balance spreadsheet 3 COMPLETING THE ACCOUNTING CYCLE(Nhóm 2)
program, implementing adjustments. 4 MERCHANDISING OPERATIONS (Nhóm 3)
• Applying the knowledge to create a good platform for 5 MERCHANDISE INVENTORY (Nhóm 4)
6 INTERNAL CONTROL AND CASH (Nhóm 5)
students to acquire academic accounting research 7 RECEIVABLES (Nhóm 6)
deeper, higher. 8 PLANT ASSETS AND INTANGIBLES (Nhóm 7)
9 CURRENT LIABILITIES AND PAYROLL (Nhóm 8)
4
3
Copyright © 2007 Prentice-Hall. All rights reserved Copyright © 2007 Prentice-Hall. All rights reserved
QUESTION: QUESTION:
1.Account a. A written promise that a customer will pay a 7. Trial Balance g. A record of transactions in date order
fixed amount of money and interest by a certain
date in the future 8. Accrued h. A liability for which the business knows the
2.Credit b. A list of all of a company's accounts with their Liability amount owed but the bill has not been paid
account numbers
3.Debit c. A summary device that is shaped like a capital T 9. Source i. The record holding all the accounts of a
with debits posted on the left side of the vertical Document business, the changes in those accounts, and
line and credits on the right side of the vertical line their balances
10. Journal j. A list of all the ledger accounts with their
4.Chart of balances at a point in time
d. The right side of a T- account
Accounts 11. Compound k. Provides the evidence and data for
5.Notes g. A detailed record of all increases and decreases Journal Entry accounting transactions
Receivable that have occurred in an individual asset, liability,
or equity during a specific period 12. Ledger l. A journal entry that is characterized by having
6.T-Account f. The left side of a T- account multiple debits and/or multiple credits
Copyright © 2007 Prentice-Hall. All rights reserved 5 Copyright © 2007 Prentice-Hall. All rights reserved 6
QUESTION:
13. Debt Ratio m. Shows the proportion of assets financed with
debt. Total liabilities /Total assets.
14. Notes n. Transferring data from the journal to the
Payable ledger
15. Prepaid
Expense
o. A liability created when a business collects
cash from customers in advance of providing Objective 1
services or delivering goods
16. Posting p. A payment of an expense in advance
17. Unearned q. A written promise made by the business to
Use accounting
Revenue pay a debt, usually involving interest, in the
future. terms
18. Ledger r. The record holding all the accounts of a
business, the changes in those accounts, and
their balances
The Accounting Process Account

Record Transactions in the • Basic summary device
Journal • Detailed record of increases and
decreases in specific assets, liabilities, or
owner’s equity during a period
Copy (post) to the Ledger
Prepare the Trial Balance
Ledger Accounting Equation

• Book or printout holding all the accounts Accounts are grouped in 3 broad categories:
Assets = Liabilities + Equity
Assets Liabilities
Economic resources that will benefit the business Creditors’ claims to assets (debt)
in the future
• Cash
• Accounts Payable
• Accounts Receivable • Notes Payable
• Notes Receivable • Accrued Liabilities
• Prepaid Expenses
• Land
• Building
• Equipment, Furniture, Fixtures
All Individual Accounts Combined

Owner’s Equity Make Up the Ledger
Cash Accounts
Owner’s claim to the assets Accounts
Receivable
Notes
Payable
Payable
• Capital Ledger
• Withdrawals
• Revenues
• Expenses
C. Lapp,
Revenues
Capital
Chart of Accounts
• List of all accounts used by a company
along with the account numbers
Objective 2
Apply the rules of debit and credit
Double Entry System T-Account
Simple tool for analyzing and determining the
• Record dual effects of each transaction balance in a given account
• Each transaction affects at least two
accounts
Account Name
• Each transaction is recorded with at least
– One debit (Left Side) (Right Side)
– One credit Debit Credit
• Total debits must equal total credits
Rules of Debit and Credit Rules of Debit and Credit

Owner’s Equity
Assets = Liabilities + Equity Debit Credit
Debit Credit Debit Credit Debit Credit Owner’s - + Owner’s
+ - - + - + Withdrawals Capital
Debit Credit Debit Credit
+ - - +
Expenses Revenues
Debit Credit Debit Credit
+ - - +
Expanding the
Rules of Debit and Credit
Remember: Just askareTheALICE!
The first and the
middle three
increased with
last are increased
credits
with a debit
Owner’s Equity Debit Credit

Owner’s _
+ A = Assets -
Owner’s _ Expenses
Capital Withdrawals + Revenues - L = Liabilities +
Debit Credit Debit Credit Debit Credit Debit Credit - I = Income* +
- + + - - + + - - C = Capital +
+ E = Expenses -
* Really, this is revenues, but “r” just doesn’t fit in!
Normal Balances Normal Balances
Assets = Liabilities + Equity Owner’s Equity
Debit Credit Debit Credit Debit Credit
+ - - + - + Owner’s _ Owner’s _ Expenses
Capital Withdrawals + Revenues
Debit Credit Debit Credit Debit Credit Debit Credit
- + + - - + + -
Normal Normal Normal
Balance Balance Balance
Normal Normal Normal Normal

Balance Balance Balance Balance
Journal
• Chronological record of the transactions
• Consists of at least one debit and one
Objective 3 credit
Record transactions in the journal
AAA received $45,000 cash on July 1 from

Journalizing Transactions Michael Lange and gave his capital in the
business
Transaction
• Identify each account affected and its type Date Accounts Affected
• Determine whether each account is Journal Page 1
increased or decreased. Use the rules of Date Description Debit Credit
debit and credit
Jul 1 Cash 45,000
• Record transaction in journal, including a Lange, Capital 45,000
brief explanation
Investment from owner
– Debit side of entry is entered first
– Total debits should always equal total credits
Explanation of Dollar amount of
Copyright © 2007 Prentice-Hall. All rights reserved 29
transaction debits and credits
General Journal General Journal
Style conventions that must be followed: • Debits are ALWAYS entered first in an
• Year is entered at the top of each page entry. Use the EXACT account title and
• The month is only entered for the first do not abbreviate
entry on a page unless the month changes • Credits are INDENTED and listed second
in the middle of the page. The month may • Do not use dollar signs
be abbreviated • SKIP A LINE between each entry
• Enter numerical date for each transaction, • Never split an entry between two pages
even if there are many entries on same
date
Exercise 1.1-1.4 Exercise 1.2

AAA received $25,000 cash on June 1 from AAA purchased $10,000 of Medical Supplies
Michael Brown and gave his capital in the on June 2, as shown on purchase invoice
business
Exercise 1.3 Exercise 1.4

AAA paid office rent expense by cash On June 3 , AAA performed for clients, for
$4,000 on June 2 which the clients will pay the company
later. The business earned $12,000 of
service revenue on account.
Posting
• Periodically, journal entries are posted to
ledger accounts to determine balances in
Objective 4 each account
• Posting – copying amounts from the
journal to the ledger
Post from the journal to the ledger
Exercise 2-9 Exercise 2-9

Cash Accounts Payable Service Revenue Cash Accounts Payable Service Revenue
25,000 25,000 10,000
GENERAL JOURNAL
DATE DESCRIPTION REF DEBIT CREDIT
Accounts Receivable M. Brown, Capital Rent Expense Accounts Receivable M. Brown, Capital Rent Expense
Jun 2 Medical Supplies 10,000
25,000 25,000
Accounts Payable 10,000
GENERAL JOURNAL
DATE DESCRIPTION REF DEBIT CREDIT Purchased medical supplies
Jun 1 Supplies
Medical Cash 25,000 Medical Supplies
M. Brown, Capital 25,000 10,000
Owner invested in business
Exercise 2-9 Exercise 2-9

Cash Accounts Payable Service Revenue Cash Accounts Payable Service Revenue
25,000 4,000 10,000 25,000 4,000 10,000 12,000
Accounts Receivable M. Brown, Capital Rent Expense Accounts Receivable M. Brown, Capital Rent Expense
25,000 4,000 12,000 25,000 4,000
GENERAL JOURNAL GENERAL JOURNAL
DATE DESCRIPTION REF DEBIT CREDIT DATE DESCRIPTION REF DEBIT CREDIT
Jun 2 Rent
Medical Expense
Supplies 4,000 Jun 3 Supplies
Medical Accounts Receivable 12,000
10,000 Cash 4,000 10,000 Service Revenue 12,000
Paid rent for the month Performed services
Exercise 2-9 Flow of Accounting Data
Cash Accounts Payable Service Revenue
25,000 4,000 10,000 12,000 Transaction Occurs
Bal 21,000 Bal 10,000 Bal 12,000
Source Documents Prepared

Accounts Receivable M. Brown, Capital Rent Expense
12,000 25,000 4,000
Bal 12,000 Bal 25,000 Bal 4,000
Transaction Analyzed
Medical Supplies
10,000
Transaction Journalized & Posted
Bal 10,000
Trial Balance
• List of all accounts with their balances
Objective 5
Prepare and use a trial balance
Trial Balance Mike Brown, M.D.

List of all accounts with their balances Trial Balance
Cash Accounts Payable Service Revenue June 30, 2008
25,000 4,000 10,000 12,000 Account title
Cash Balance
Bal 21,000 Bal 10,000 Bal 12,000
Debit Credit
Cash 21,000
Accounts Receivable M. Brown, Capital Rent Expense Accounts Receivable 12,000
12,000 25,000 4,000 Medical Supplies 10,000
Bal 12,000 Bal 25,000 Bal 4,000 Accounts Payable 10,000
M. Brown, Capital 25,000
Medical Supplies Service Revenue 12,000
10,000 Rent Expense
Bal 10,000 4,000
Totals 47,000
Copyright © 2007 Prentice-Hall. All rights reserved
47,000 48
Locating Trial Balance Errors Locating Trial Balance Errors
What if it doesn’t balance? • Divide the difference by two
• Is the addition correct? – Is there a debit/credit balance for this amount
posted in the wrong column?
• Are all accounts listed?
• Divide the difference by 9. If evenly
• Are the balances listed correctly?
divisible, the error may be a slide( $ 1,000
-> $100) or transposition error (1,200-
>2,100)
Exercise 2
Exercise
• Transaction 3:
• Transaction1: On August 4, Woodward paid $50,000 cash
Woodward Technology Solutions received for building.
$60,000 cash on August 1 from Right Transaction 4:
Woodward . On August 6, Woodward collected cash of
Transaction 2: $3,000 for service revenue
Woodward purchased $200 of supplies on Transaction 5:
account on August 2, as shown on purchase On August 9, Woodward paid $100 on the
invoice account payable
Exercise 2 Exercise 2
• Transaction 6: • Transaction 8:
On August 17, Woodward performed On August 31, Woodward paid the following
services for clients, for which the clients will cash expenses: salary expense, $1,200;
pay the company later. The business earned rent expense,$500.
$2,100 of service revenue on account. Requirements: E2/P25
Transaction 7: 1. Record each transaction in the journal
On August 23, Woodward collected $1,200 2. Ledger accounts
cash from the client in transaction 6.
3. Prepare the trial balance
Exercise 2-19
Woodward Technology Solutions
Trial Balance
August 31, 2008
Cash 12,400
Accounts Receivable 900 End of Chapter 1
Supplies 200
Building 50,000
Accounts Payable 100
R. Hawk, Capital 60,000
Service Revenue 5,100
Salary Expense 1,200
Rent Expense 500
Totals 65,200 65,200

Chương 1 - KTUC - SV

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chương 1 - KTUC - SV

Uploaded by

Copyright:

Available Formats

INTRODUCE

MINISTRY OF INDUSTRY AND TRADE

The Accounting Process Account

Prepare the Trial Balance

Ledger Accounting Equation

Assets = Liabilities + Equity

All Individual Accounts Combined

Apply the rules of debit and credit

Rules of Debit and Credit Rules of Debit and Credit

Owner’s Equity Debit Credit

* Really, this is revenues, but “r” just doesn’t fit in!

Normal Normal Normal Normal

Record transactions in the journal

AAA received $45,000 cash on July 1 from

Exercise 1.1-1.4 Exercise 1.2

Exercise 1.3 Exercise 1.4

Exercise 2-9 Exercise 2-9

Exercise 2-9 Exercise 2-9

Source Documents Prepared

Prepare and use a trial balance

Trial Balance Mike Brown, M.D.

You might also like