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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 16-1 Recording Adjusting Entries.

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Presentation on theme: "CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 16-1 Recording Adjusting Entries."— Presentation transcript:

1 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 16-1 Recording Adjusting Entries

2 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 16-1 ADJUSTING ENTRIES RECORDED FROM A WORK SHEET 3 page Heading 2.Date 3.Identify the first adjustment 4.Account debited 5.Debit 6.Account credited 7.Credit 8.Continue down the Adjustments columns

3 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 16-1 ADJUSTING ENTRY FOR ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS page 482

4 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 16-1 ADJUSTING ENTRY FOR MERCHANDISE INVENTORY page 482

5 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 16-1 ADJUSTING ENTRY FOR SUPPLIES— OFFICE page 483

6 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 16-1 ADJUSTING ENTRY FOR SUPPLIES— STORE page 483

7 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 16-1 ADJUSTING ENTRY FOR PREPAID INSURANCE page 484

8 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 16-1 ADJUSTING ENTRY FOR DEPRECIATION—OFFICE EQUIPMENT page 484

9 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 16-1 ADJUSTING ENTRY FOR DEPRECIATION—STORE EQUIPMENT page 485

10 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 16-1 ADJUSTING ENTRY FOR FEDERAL INCOME TAXES page 485

11 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 16-2 Recording Closing Entries for Income Statement Accounts

12 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 16-2 THE INCOME SUMMARY ACCOUNT page 487

13 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 13 LESSON 16-2 CLOSING ENTRY FOR ACCOUNTS WITH CREDIT BALANCES 1 2 page Debits to close 4 1.Heading 2.Date4.Credit to Income Summary 33

14 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 14 LESSON 16-2 CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCES 1 24 page Credits to close 1.Date 2.Account debited 4.Debit amount 3 3

15 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 15 LESSON 16-2 SUMMARY OF CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCES page 490 Bal.209,960.00Closing 209, (New Bal. zero) Purchases Adj. (mdse. inv.)15,840.00Closing (credit amounts)500, Closing (debit accounts)404,099.15(New Bal.80,313.95) Income Summary

16 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 16 LESSON 16-2 CLOSING ENTRY TO RECORD NET INCOME page Credit Retained Earnings 1.Date 2.Debit Income Summary

17 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 17 LESSON 16-2 CLOSING ENTRY FOR DIVIDENDS page Credit Dividends 1.Date 2.Debit Retained Earnings 1 2 3

18 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 18 LESSON 16-2 COMPLETED CLOSING ENTRIES FOR A CORPORATION RECORDED IN A JOURNAL page 492

19 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 16-3 Preparing a Post-Closing Trial Balance

20 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 20 LESSON Balances of asset accounts 4.Balances contra asset, liability, and capital accounts POST-CLOSING TRIAL BALANCE 1 6 page Double lines 6.Totals 5.Word Totals 2.Accounts that have balances 1.Heading

21 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 21 LESSON 16-3 ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATION page 497 (continued on next slide) 1.Source documents are checked, and transactions are analyzed. 2.Transactions are recorded in journals. 3.Journal entries are posted to the accounts payable ledger, the accounts receivable ledger, and the general ledger. 4.Schedules of accounts payable and account receivable are prepared from the subsidiary ledgers. 5.A work sheet is prepared from the general ledger.

22 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 22 LESSON 16-3 ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATION 6.Financial statements are prepared. page 497 (continued from previous slide) A post-closing trial balance of the general ledger is prepared. 8.Adjusting and closing entries are posted to the general ledger. 7.Adjusting and closing entries are journalized from the work sheet.


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