CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 4-5 End-of-Period Work for a Departmentalized Business

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Chapter 4 Objectives Financial Reporting for a Departmentalized Business After studying Chapter 4, you will be able to: Define accounting terms related to cost accounting and financial reporting for a departmentalized merchandising business. Identify accounting concepts and practices related to cost accounting and financial reporting for a departmentalized merchandising business. Distinguish between direct and indirect expenses. Prepare an interim departmental statement of gross profit. Prepare a work sheet for a departmentalized merchandising business. Prepare financial statements for a departmentalized merchandising business. Analyze financial statements using selected component percentages. Complete end-of-period work for a departmentalized merchandising business. 2 LESSON 4-4

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 4-5 adjusting entries: journal entries recorded to update general ledger accounts at the end of a fiscal period closing entries: journal entries used to prepare temporary accounts for a new fiscal period post-closing trial balance: a trial balance prepared after the closing entries are posted accounting cycle: the series of accounting activities included in recording financial information for a fiscal period 3 LESSON 4-5

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON Enter the adjusting entries without additional explanation. JOURNALIZING ADJUSTING ENTRIES FOR A DEPARTMENTALIZED BUSINESS page Write Adjusting Entries in the Account Title column. 1 2

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 4-5 JOURNALIZING CLOSING ENTRIES FOR A DEPARTMENTALIZED BUSINESS page Write Closing Entries in Account Title column. 2.Record entry to close income statement accounts with credit balances. 3.Write (continued on general journal page 15) to show that the closing entries are continued. 2 3

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 4-5 JOURNALIZING CLOSING ENTRIES FOR A DEPARTMENTALIZED BUSINESS page Write Closing Entries (continued) in the Account Title column. 5.Record entry to close income statement accounts with debit balances. 6.Record entry to close Income Summary to Retained Earnings. 7.Record entry for Dividends

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 4-5 POST-CLOSING TRIAL BALANCE FOR A DEPARTMENTALIZED BUSINESS page 122

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON Record entries in journals. SUMMARY OF ACCOUNTING CYCLE page Post journal entries to the ledgers. 9.Prepare a post-closing trial balance. 8.Journalize and post adjusting and closing entries. 7.Prepare financial statements. 6.Prepare a trial balance on the work sheet. 5.Prepare schedules of accounts receivable and accounts payable from the subsidiary ledgers. 4.Prepare interim departmental statement of gross profit. 1.Verify source documents for accuracy.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 4-5 DEFINE TERMS REVIEW In Quizlet adjusting entries closing entries post-closing trial balance accounting cycle page 117 Edit this set: Chapter 4 AdvAcc (then SAVE)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Exit Ticket for today: Audit Your Understanding What is the purpose of adjusting entries? 2.Which accounts are closed at the end of an accounting period? 3.What is the purpose of a post-closing trial balance? 4.Which accounting activities in the accounting cycle are performed at the end of a fiscal period? 10 LESSON 4-5 In a Word Document, SaveAS: Chapter4-5AYUYourName And drop in my Inbox today!

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Complete the following assignments for Chapter 4-5 today Define Terms Review on page 124. Answer Audit Your Understanding questions on page 124. Complete Work Together 4-5 on Aplia – page 124. Complete On Your Own 4-5 on Aplia – page 124. Complete Application Problem 4-5 on Aplia – page LESSON 4-5