intermediateaccountingareviewoftheaccountingcycle-全文預(yù)覽
【正文】 ginal Credit to a Revenue Account The Taccounts below illustrate the effect that the adjusting entry would have on the related accounts. 241 If a liability account was originally credited when cash was received, the adjusting entries require that the liability be debited and the revenue account be credited for the amount applicable to the current period. If Rosi, Inc., had originally credited Unearned Rent Revenue for $2,550, the adjusting entry shown next would be made. Original Credit to a Liability Account (continues) 242 The Taccounts below illustrate the effect that the adjusting entry would have on the related accounts. Original Credit to a Liability Account 243 Transactions Involving Estimates In recording asset depreciation, operations are charged with a portion of the asset’s cost, and the carrying value of the asset is reduced using accumulated depreciation (a contra account). Asset Depreciation 244 Transactions Involving Estimates Depreciation for 2020 on Rosi’s plant assets is $7,800 for building and $1,500 for furniture and fixtures. The adjustments at the end of the year are as follows: 245 Transactions Involving Estimates Under the accrual concept, an adjustment should be made for estimated bad debts in the current period rather than when specific accounts bee uncollectible. Bad Debts 246 Transactions Involving Estimates Using this concept, Rosi, Inc., needs to increase the allowance account by $1,100. The entry would be as follows: 247 ? Adjusting entries always incorporate a balance sheet account and an ine statement account. Adjusting Entries Summary ? Adjusting entries do not involve cash. 248 Preparing Financial Statements 1. Identify all revenues and expenses— these account balances are used to prepare the ine statement. 2. Compute the ine. 3. Compute the ending retained earnings balance. 4. Prepare a balance sheet using the balance sheet accounts from the trial balance and the modified retained earnings balance (from step 3). 249 Using a Spreadsheet An optional step in the accounting process is to use a spreadsheet (also called a work sheet) to facilitate the preparation of adjusting entries and financial statements. The availability of spreadsheet software makes the preparation of a spreadsheet quite easy. A spreadsheet for Rosi, Inc, is shown next. 250 (continues) 251 252 ? Real accounts ? Not closed to a zero balance at the end of the accounting period. ? Carried forward to the next period. ? Nominal (or temporary) accounts ? Closed to a zero balance at the end of each accounting period. ? All ine statement accounts and the dividend account. ? Closing entries reduce all nominal acc
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