1 / 12

COMPLETING THE ACCOUNTING CYCLE

COMPLETING THE ACCOUNTING CYCLE. ACT 2112 KUMPULAN 8 SHERLIZA PUAT NELSON. Content. Accrual accounting Adjusting entries Closing the books Summary of the accounting cycle Adjusting entries: Original entries to expense or revenue. Accounting Cycle. Step 1- Analyse transaction

vida
Télécharger la présentation

COMPLETING THE ACCOUNTING CYCLE

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. COMPLETING THE ACCOUNTING CYCLE ACT 2112 KUMPULAN 8 SHERLIZA PUAT NELSON ACT 2112 KUMPULAN 8 SHERLIZA

  2. Content • Accrual accounting • Adjusting entries • Closing the books • Summary of the accounting cycle • Adjusting entries: Original entries to expense or revenue ACT 2112 KUMPULAN 8 SHERLIZA

  3. Accounting Cycle • Step 1- Analyse transaction • Step 2- Record effects of transactions • Prepare journal entries • Step 3- Summarise effects • Posting to ledgers • Prepare Trial Balance • Step 4- Prepare reports ACT 2112 KUMPULAN 8 SHERLIZA

  4. Time period concept • Fiscal year/ financial year • Periodic reporting ACT 2112 KUMPULAN 8 SHERLIZA

  5. Accrual basis accounting • A system of accounting in which revenues and expenses are recorded as they are earned and incurred, and not necessarily when cash is received or paid. • Cash basis? ACT 2112 KUMPULAN 8 SHERLIZA

  6. Revenue recognition principle? • Matching principle? ACT 2112 KUMPULAN 8 SHERLIZA

  7. Accounting cycle • Adjustments • Prepaid revenue • Accrued revenue • Prepaid expenses • Accrued expenses ACT 2112 KUMPULAN 8 SHERLIZA

  8. Prepaid revenue • Unearned revenues • Cash paid for services not yet been performed/ rendered. • In the future, company is obliged to provide the services. • Customer/client paid in advance for your services. ACT 2112 KUMPULAN 8 SHERLIZA

  9. Accrued revenue • Unrecorded receivables • Services that had been performed but had not been paid for. • No cash had been received after services had been carried out. ACT 2112 KUMPULAN 8 SHERLIZA

  10. Prepaid expenses • Company had paid for the expenses in advance. • Example, rent expenses that had been for 12 months. ACT 2112 KUMPULAN 8 SHERLIZA

  11. Accrued expenses • Unrecorded liabilities • Payables • Expense that had occurred but had not been paid for. • Example, electricity bills for the month but will only be paid next month. ACT 2112 KUMPULAN 8 SHERLIZA

  12. Accounting cycle – Step 4 • Financial Statements • Income Statement/ Trading,Profit and Loss Account. • Statement of Retained Earnings • Balance Sheet ACT 2112 KUMPULAN 8 SHERLIZA

More Related