Accounting 211 Financial and Managerial Accounting Teaching Assistant Hyun Jung (Joan) Lee

Spring, Contents 1. Introduction 2. Review of Chapter2 3. Review of Chapter3 4. Practice

Introduction 1

Spring, Personal Blog : Click on “ACCTG 211 Spring 2008” “Student Information Form”  Bring it next Friday!!!! Office : 381A Business Building, Office Hour : 8 AM. ~ 10:00 AM on Tuesday Recitation Materials

Spring, Due Date : “Next Monday 6 PM.” Problem : Chapter3-P3, P4, and P-5 For Registering The URL : WileyPlus Online Homework

Review of Chapter2 2

Spring, Complete Set of Financial Statement Income Statement Statement of Changes in Owners’ Equity Balance Sheet Statement of Cash Flow Notes to the financial Statements Financial Statements Overview

Spring, Next to each item, indicate whether it is an Asset, Liability, Equity, Revenue or Expense. _____Cash _____Cash _____Common Stock ($1 par) _____Depreciation Expense _____Insurance Expense _____Interest Receivable _____Interest Earned _____Investment in U.S. Bonds Elements of Financial Statements

Spring, Next to each item, indicate whether it is an Asset, Liability, Equity, Revenue or Expense. _____Cash Asset _____Cash Asset _____Common Stock ($1 par) Equity _____Depreciation Expense Expense _____Insurance Expense Expense _____Interest Receivable Asset _____Interest Earned Revenue _____Investment in U.S. BondsAsset Elements of Financial Statements, conti.

Spring, More Elements _____Miscellaneous Expense _____Miscellaneous Expense _____Prepaid Insurance _____Rent Revenue _____Retained Earnings _____Salaries Expense _____Salaries Payable _____Service Revenue _____Supplies Used _____Unearned Rent More elements of financial statements

Spring, More Elements _____Miscellaneous Expense Expense _____Miscellaneous Expense Expense _____Prepaid Insurance Asset _____Rent Revenue Revenue _____Retained Earnings Equity _____Salaries Expense Expense _____Salaries Payable Liability _____Service Revenue Revenue _____Supplies Used Expense _____Unearned Rent Liability More elements of financial statements, conti.

Spring, Accounting Equation Assets = Liabilities + Owner’s Equity Cost of the Items used in Running a Business = Where the Funds to Buy those items came from, either creditors or the owners Retained Earning Equation End of R/E = Beginning R/E + Net Income – Dividends Statement of changes in Owners’ Equity End of Contributed Capital (C/C) + End of Retained Earnings End of Contributed Capital (C/C) + End of Retained Earnings End of C/C = Beginning of C/C + Stock Issued during that period End of C/C = Beginning of C/C + Stock Issued during that period End of R/E = Beginning R/E + Net Income – Dividends Financial Ratio  Please see the summary table in 1 st Recitation Material!!~ Equations Overview

Review of Chapter3 3

Spring, Transactions occur Record at JOURNAL ENTRY Posted to the GENERAL LEDGER. ADJUSTING ENTRIES are made and posted. Trial balance A list of each account and its debit or credit balance Prepared any time Catch errors with the debit-credit part of the accounting system Usually before and then again after adjustments THE ACCOUNTING CYCLE

Spring, Financial statements are prepared. Closing journal entries are recorded and posted A post-closing trial balance may be prepared The Goal of the Whole Process Financial Statements that accurately reflect the financial condition and transactions of the company Communicating Information to Users THE ACCOUNTING CYCLE, conti

Spring, “Journal Entry” is the recording of the economic effects of a particular transaction. Debits on the LEFT!! Credits on the RIGHT!! Journal Entries

Spring, Increases in assets go on the LEFT  DEBIT How this Debit/Credit Stuff Works Assets= Liabilities+ Owners’ Equity Revenue Expense + Revenue Expense Debits increase ASSETS Credits decrease ASSETS -

Spring, Increases in liabilities go on the RIGHT  CREDIT Increases in equity go on the RIGHT  CREDIT How this Debit/Credit Stuff Works, conti Assets= Liabilities+ Owners’ Equity Revenue Expense + Revenue Expense Credits increase Liabilities/Equity Debits decrease Liabilities/Equity -+--+

Spring, They are called income statement accounts, or temporary or nominal accounts. Revenue and Expense Accounts Assets= Liabilities+ Owners’ Equity Revenue Expense + Revenue Expense

4 Practice!!!

Spring, Problem 1 Problem 4 Problem 6 1 st Homework Due Date : “Next Monday 6 PM.” Problem : Chapter3-P3, P4, and P-5 Practice A

Spring, Do you have any questions? Welcome to Accounting World!!~ 381A Business Building ,