【正文】 de r s 39。 8. 224 Event 7: On March 1, 2022, Conner invested $60,000 in a certificate of deposit (CD). 1. Decrease assets (cash). 2. Increase assets (certificate of deposit). Asset Exchange Transaction = L i a b . + C a s h + A c c o u n t s R e c . + I n t e r e s t R e c . + C e r t i f i c a t e o f D e p o s i t = S a l a r i e s P a y a b l e + C o m m o n S t o c k + R e t a i n e d E a r n i n g s R e v e n u e E x p e n s e s = N e t I n c o m e ( 6 0 , 0 0 0 ) + n / a + n / a + 6 0 , 0 0 0 = n / a + n / a + n / a n / a n / a = n / a ( 6 0 , 0 0 0 ) IAA s s e t s S t o c k h o l d e r s 39。 3: Transfer balances in expenses to retained earnings 221 Matching Concept The objective of accrual accounting is to improve matching of revenues with expenses. Cash basis accounting can distort the measurement of ine because it sometimes fails to properly match revenues with expenses. The problem is that cash is not always received or paid in the period when the revenue is earned or when the expense is incurred. 222 LO 5 Record business events involving interestbearing receivables and payables in a horizontal financial statements model. 223 Since you are familiar with these types of events, let’s look at the summary of the general ledger accounts for Conner Consultants. Second Accounting Cycle = Li a b. +E v e nt N o. C a s h + A c c ou nt s R e c e i v a bl e + I nt e r e s t R e c e i v a bl e + C e r t i f i c a t e of D e po s i t = S a l a r i e s P a y a bl e + C om m on S t oc k + R e t a i ne d E a r ni ng s O t he r A c c ou nt Ti t l e s B e g. B a l . 5 3 ,0 0 0 2 4 ,0 0 0 6 ,0 0 0 5 ,0 0 0 6 6 ,0 0 0 1 2 5 ,0 0 0 2 5 ,0 0 0 2 9 6 ,0 0 0 9 6 ,0 0 0 C on s . R e v . 3 1 0 2 , 0 0 0 ( 1 0 2 , 0 0 0 )4 2 2 ,0 0 0 ( 2 2 ,0 0 0 ) S a l . E x p. 5 ( 2 0 ,0 0 0 ) ( 2 0 ,0 0 0 )6 ( 1 0 ,0 0 0 ) ( 1 0 ,0 0 0 ) D i v i de nd s 7 8 E nd . B a l .A s s e t s S t oc k ho l de r s 39。 E q u i t y 7 7 , 0 0 0$ A s o f D e c e m b e r 3 1 , 2 0 0 8C O N N E R C O N S U L T A N T SB a l a n c e S h e e t216 Preparing Financial Statements C a s h Fl ow s f r om O pe r a t i ng A c t i v i t i e sC a s h R e c e i pt s f r om C us t om e r s 6 0 , 0 0 0$ C a s h P a y m e nt s f or S a l a r y E x pe ns e ( 1 0 , 0 0 0 ) C a s h P a y m e nt s f or A dv e r t i s i ng E x pe ns e s ( 2 , 0 0 0 ) N e t C a s h Fl ow f r om O pe r a t i ng A c t i v i t i e s 4 8 , 0 0 0$ C a s h Fl ow s f or I nv e s t i ng A c t i v i t i e s C a s h Fl ow s f r om Fi na nc i ng A c t i v i t i e sC a s h R e c e i pt s f r om I s s ui ng C om m on S t oc k 5 , 0 0 0 N e t I nc r e a s e i n C a s h 5 3 , 0 0 0 P l us B e gi nni ng C a s h B a l a nc e E ndi ng C a s h B a l a nc e 5 3 , 0 0 0$ C O N N E R C O N S U LTA N TSS t a t e m e nt of C a s h Fl ow sFor t he Y e a r E nde d D e c e m be r 3 1 , 2 0 0 8217 LO 4 Describe the matching concept, the accounting cycle and the closing process. 218 The Closing Process Transfers ine (or loss) and dividends to Retained Earnings. Establishes zero balances in all revenue, expense, and dividend accounts. 219 Temporary accounts track financial results for a limited period of time. Temporary and Permanent Accounts Revenues Expenses Dividends TemporaryAccounts Permanent Accounts Assets Liabilities Equity Permanent accounts track financial results from year to year. 220 = +( 1 ) 5 , 0 0 0 ( 4 ) 1 6 , 0 0 0 ( 1 ) 5 , 0 0 0 ( 3 ) 6 0 , 0 0 0 ( 5 ) ( 1 0 , 0 0 0 ) ( 5 ) ( 1 0 , 0 0 0 ) 6 , 0 0 0 ( 6 ) ( 2 , 0 0 0 ) C l . 1 8 4 , 0 0 0 B a l . 5 3 , 0 0 0 C l . 2 ( 1 6 , 0 0 0 ) C l . 3 ( 2 , 0 0 0 ) B a l . 6 6 , 0 0 0 ( 2 ) 8 4 , 0 0 0 ( 3 ) ( 6 0 , 0 0 0 ) B a l . 2 4 , 0 0 0 ( 2 ) 8 4 , 0 0 0 C l . 1 ( 8 4 , 0 0 0 ) B a l . ( 4 ) 1 6 , 0 0 0 C l . 2 ( 1 6 , 0 0 0 ) B a l . ( 6 ) 2 , 0 0 0 C l . 3 ( 2 , 0 0 0 ) B a l . C a s hA s s e t sA c c o u n t s R e c e i v a b l eL i a b i l i t i e sS a l a r i e s P a y a b l eA d v e r t i s i n g E x p e n s eS t o c k h o l d e r s 39。 E q u i t yC o m m n S t o c k 5 , 0 0 0$ R e t a i n e d E a r n i n g s 6 6 , 0 0 0 T o t a l S t o c k h o l d e r s 39。 E q u i t y 7 1 , 0 0 0$ C O N N E R C O N S U L T A N T SI n c o m e S t a t e m e n tF o r t h e Y e a r E n d e d D e c e m b e r 3 1 , 2 0 0 8C O N N E R C O N S U L T A N T SS t a t e m e n t o f C h a n g e s i n S t o c k h o l d e r s 39。 E q u i t y C a s h F l o w 211 LO 2 Organize general ledger accounts under an accounting equation. 212 Summary of Transactions Now, let’s prepare the financial statements for Conner Consultants using the data presented above. = Li a b. +E v e nt N o. C a s h + A c c ou nt s R e c e i v a bl e = S a l a r i e s P a y a bl e + C om m on S t oc k + R e t a i ne d E a r ni ng s O t he r A c c o