会计学第三章解析.pptVIP

* 41 This summary will prove very useful when completing your homework or studying for the next exam. Here is how we read the table. Before we record a prepaid expense, the assets of the company are overstated and the expenses are understated in the current period. The proper adjusting entry is to debit, or increase, an expense account and credit, or decrease, an asset account. Take a few minutes to go over the remaining three types of adjusting entries before going to the next slide where we will use a spreadsheet to prepare the adjusting entries and financial statements. * 43 We prepared this work sheet using Excel but you could use any electronic spreadsheet. We begin with the unadjusted trial balance, that is, the trial balance before we make our adjusting entries. On the next slide, we will post our adjusting entries for FastForward. * 44 Look at adjusting journal entry c. This is the entry to record depreciation expense for the period ended December 31, 2009. We debit, or increase, depreciation expense and credit, or increase, accumulated depreciation – equipment. Do you recall this type of adjusting entry from our previous discussion? The total debits and credits are equal on the unadjusted trial balance and on the adjustments set of columns. Let’s move on to the adjusted trial balance. * 45 The adjusted trial balance combines the unadjusted trial balance account balances with the adjustments we make. Be careful when doing the arithmetic. For example, look at entry b. It is the entry to adjust the supplies account for the physical inventory taken at year end. The supplies account on the unadjusted trial balance is nine thousand, seven hundred twenty dollars. Our adjustment reduced the supplies on hand, so the adjusted trial balance account is eight thousand, six hundred seventy dollars. Once we have completed the work sheet, we can move on to the preparation of the company’s financial statements. We always begin with the income statement. * You can see ho