财务会计课件 from Professor CarterChapter04.docx

财务会计课件 from Professor CarterChapter04.docx

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财务会计课件fromProfessorCarterChapter04

Chapter4

AdjustingProcess

Inthischapteryouwillseehowaccountingsystemsassurethedatareportedinfinancialstatementsreflectoutcomesofactualbusinessoperations.Theprocessresultinginreasonabledollaramountsreportedinfinancialstatementsistheadjustingprocess.

TheAccountingProcess（sofar）

Inthefirstthreechapters,wesawthatthegoalofacompany'sfinancialaccountingsystemistoprovideinformationaboutthecompany'sresourcesandwheretheycamefrom.Theinformationisprovidedintheformoffinancialstatements.Togenerateinformationforfinancialstatements,accountingsystemsareorganizedaroundtheaccountingequation:

Assets

=

Liabilities

+

Stockholders'Equity

Theequalityoftheaccountingequationisconstantlymaintainedthroughthedebitsequalcreditsprocess.

Inbrief,inordertogenerateinformationforfinancialstatements,accountingsystems:

1.organizedatatobereportedbyusingachartofaccountsandageneralledger.

2.analyzebusinessevents,ortransactions,andconvertthemintodebitsandcreditsthroughthepreparationofjournalentries.Thejournalentriesarerecordedinthegeneraljournal.

3.postjournalentriestothegeneralledger.

4.verifydatainthegeneralledgeraccountswillresultinabalancedaccountingequationthroughpreparationofatrialbalance.

Onceatrialbalanceisprepared,itispossibletopreparefinancialstatementsfromthetrialbalancedata.

BasedontheworkinChapter3,theParksComputerServiceCorporationpreparedtheSeptemberfinancialstatementspresentedagaininExhibit4-1,4-2,and4-3.

Exhibit4-1

ParksComputerServiceCorporation

IncomeStatement

fortheMonthEndedSeptember30

Revenues

FeesRevenue

$3,000

Expenses

UtilitiesExpense

$60

TelephoneExpense

$45

WagesExpense

$450

TotalExpenses

$555

NetIncome

$2,445

FromtheParksComputerServiceCorporation'sincomestatementwesawmanagementusedthecompany'sresourcesinSeptembertogenerate$2,445ofadditionalresources（netincome）.Theincomestatementshowedmanagementbroughtinresourcesof$3,000（revenues）andused$555ofresources（expenses）.

Exhibit4-2

ParksComputerServiceCorporation

StatementofRetainedEarnings

fortheMonthEndedSeptember30

RetainedEarnings,Sept.1

$900

NetIncomeforSeptember

$2,445

Subtotal

$3,345

Dividends

$75

RetainedEarnings,Sept.30

$3,270

FromtheParksComputerServiceCorporation'sstatementofretainedearningswesawthatofthe$2,445resourcesgeneratedthroughmanagementoperationsinSeptember（netincome）,$75weredistributedtotheowner（dividends）.BytheendofSeptember,thecompanyretained$3,270ofresourcesgeneratedthroughmanagementoperations.

Exhibit4-3

ParksComputerServiceCorporation

BalanceSheet

September30

Assets

Liabilities&Stockholders'Equity

Cash

$10,755

Liabilities

AccountsReceivable

$1,210

AccountsPayable

$240

Supplies

$490

UnearnedFeesRevenue

$400

PrepaidRent

$975

TotalLiabilities

$640

PrepaidInsurance

$480

TotalAssets

$13,910

Stockholders'Equity

CommonStock

$10,000

RetainedEarnings

$3,270

TotalStockholders'Equity

$13,270

TotalLiabilities&Stockholders'Equity

$13,910

Thecompany'sbalancesheetshowedthecompanyhadresources（assets）of$13,910

onSeptember30.$640ofassetswereborrowed（liabilities）.$10,000ofassetswereinvestedbytheowner（commonstock）.$3,270ofassetsweregeneratedthroughmanagementoperationsandretainedinthecompany（retainedearnings）.

ReasonableInformation:

theNeed

forAdjustingEntries

Nowthatwearefamiliarwithhowtheaccountingsystemworkstoprovideinformation,thenextimportantquestionis:

Istheinformationreportedinthefinancialstatementsreasonable?

Forexample,iftheParksComputerServiceCorporation'sSeptemberincomestatementshowsmanagementgenerated$2,445ofadditionalresourcesthroughbusinessoperationsinSeptember,canwerelyonthisinformationfordecisions?

Didmanagementreallygenerate$2,445ofresources,ordiditgeneratecloserto$1,000ofresources?

Lookingatthecompany'sSeptember30balancesheet,didthecompanyreallyhave$13,910ofresourcesordidithaveapproximately$10,000?

Toanswerquestionssuchasthese,accountingsystemsroutinelyreviewallthedollaramountstobereportedinthefinancialstatementstoseeiftheyarereasonablebeforethestatementsarepreparedanddistributedforusebydecisionmakers.

Remember,informationinfinancialstatementscomesfromatrialbalance.Informationinatrialbalancecomesfromaccountsinthegeneralledger.Onceatrialbalanceispreparedfromthegeneralledger,eachaccountinthetrialbalanceisreviewedforreasonableness