Prepare post-closing trial balance 7.Post adjusting and closing entries 6.Journalize adjusting and closing entries 5.Prepare financial statements 4.Prepare work sheet 3.Post 2.Journalize 1.Analyzes transactions
Merchandising Business Retail vs. Wholesale Merchandise vs. Supplies Corporation Share of stock Capital stock Stockholder Exists independent of owners Legal rights of a person Own property, incur liabilities, enter contracts in its own name Sell ownership in itself Primary difference from proprietorship is in the capital accounts.
Retail merchandising business Corporation Chart of Accounts (text pg. 231) Similarities Differences
Business Entity Information in a corporation’s accounting system is kept separate from the personal records of its owners. Going Concern Business is organized with the expectation that the business will remain in operation indefinitely. Historical Cost Actual amount paid for merchandise or other items bought is recorded. Objective Evidence A source document is prepared for each transaction.
Used to record only one kind of transaction 4 main types Purchases Journal Purchases of merchandise on account Cash Payments Journal All cash payments Sales Journal Sales of merchandise on account Cash Receipts Journal All cash receipts General Journal
Special Amount columns Include a heading that lists the name of a general ledger account General Amount columns Account name will be written in the general account title column
Used when purchasing merchandise Classified as a Cost account (Cost of Merchandise sold section of chart of accounts) Cost of Merchandise Price a business pays for goods it purchases to sell Markup Amount added to the cost of merchandise to establish selling price Purchases Debit Normal Balance
November 2– Purchased merchandise on account from Crown Distributing, $2, Purchase Invoice No. 83. Debit Normal Balance Purchases 2, Credit Normal Balance Accounts Payable/ Crown Distributing 2,039.00
Vendor Business from which merchandise, supplies, or other assets are bought Purchase Invoice Terms of sale
Merchandise purchased on account Only one amount column
November 2. Purchased merchandise on account from Crown Distributing, $2, Purchase Invoice No Write the date. 2.Write the vendor name. 3.Write the purchase invoice number. 4.Write the amount of the invoice.
Rule a single line across the amount column. 2.Write the date. 3.Write the word Total. 4.Add the amount column. 5.Write the total. 6.Rule double lines across the amount column.
Complete the following problems on aplia.com: Work Together 9-1 (Text pg. 241) On Your Own 9-1 (Text pg. 241) Application 9-1 (Text pg. 260) Chapter 9 Study Guide