1. Principles of Accounting
Asst.Prof.Dr. Panchat Akarak
School of Accounting
Chiang Rai Rajabhat University
Accounting I

2. Accounting Cycle 1 Adjusting Journal Entries
Post Entries to Ledger Accounts
Prepare Unadjusted Trial Balance
Adjusting Journal Entries
Prepare Adjusted Trial Balance 1
Record Journal Entries
Prepare Financial Statement
Record Reversing Entries/
Opening Entries
Prepare Post. Closing Trial Balance
Record Closing Entries

3. Step of booking
Step 1 Recorded 1. General Journal Step 2 Posting 2. Ledger/ GL Step 3 Balance Accounts 3. Trial Balance Step 4 Recorded Adjusted 4. General Journal Step 5 Prepare worksheet 5. Working Paper Step 6 Prepare F/S 6. Financial Statement Step 7 Prepare Closing 7. General Journal Step 8 Recorded Opening/ 8. General Journal Reversing entries

4. The Accounting Cycle Summarized
The Work Sheet 10 Columns
The Trial Balance Columns
The Adjustments Columns
The Adjusted Trial Balance Columns
The Income Statement Columns
The Financial Position Statement Columns

5. The Accounting Cycle Summarized
Preparing Financial Statements from the work sheet (or Working paper)
Income Statement
Financial Position Statement

6. The Accounting Cycle Summarized
Journalizing Adjusting Entries the Closing Process
Closing the Revenue Account(s)
Closing the Expense Account(s)
Closing the Profit and Loss Summary Account
Closing the Owner’s Drawing Account
Closing Process Summarized
Post-Closing Trial Balance

7. Closing entries
Dec. 31 Dr. Service Revenue xx Other Revenue xx Cr. Profit and Loss Summary Account xx (Income Summary) To close revenue accounts

8. Closing entries
Dec. 31 Dr. Profit and Loss Summary Account xx (Income Summary) Cr. Payroll Expense xx Utilities Expense xx Supplies Expense xx Insurance Expense xx Depreciation Expense-Building xx Depreciation expense-Equipment xx To close expense accounts

9. Closing entries Dec. 31 (Profit or net income)
Dr. Profit and Loss Summary Account xx
(Income Summary)
Cr. John Capital xx
To close net income to capital

10. Closing entries Dec. 31 (Loss or net income)
Dr. John Capital/Retained Earning xx
Cr. Profit and Loss Summary Account xx
(Income Summary)
To close net income to capital

11. Closing entries Dec. 31 Dr. John Capital xx Cr. John Drawing xx
To close the owner’s drawing account

12. Post-Closing Trial Balance
A post-closing trial balance is taken after revenue, expense, and drawing accounts have been closed.
Only asset, liability, and owner’s capital accounts appear on the post-closing trial balance.
The post-closing trial balance serves as the start of the new accounting period.

13. Financial Statement Financial Position Statement -Liabilities
-Assets
-Liabilities
-Owner’s Equity

14. Financial Position Statement
Assets
Liabilities & Equity
Current Assets
Current Liabilities
Cash Xx
Bank overdraft xx
Accounts Receivable
Accounts Payable
Note Receivable
Note Payable
Supplies
other Liabilities
Noncurrent Assets
Noncurrent Liabilities
Land
Loan
Building-net
Owner’s Equity
Equipment-net
Capital-John
Total Assets
Total Liabilities & Equity

15. The classified Financial Position Statement
Current Assets such as;
-Cash and Cash Equivalent
-Accounts Receivable,
-Note Receivable,
-Prepaid Expenses
-Accrued Revenue
-Supplies on hand

16. The classified Financial Position Statement
Noncurrent Assets such as;
-Long term Investment
-Land
-Buildings
-Machinery
-Equipment
-Accumulated Depreciation

17. The classified Financial Position Statement
Current Liabilities such as;
-Bank Overdraft
-Accounts Payable,
-Note Payable,
-Accrued Expenses
-Deferred Revenue
-Shot term loan
-Shot term other liabilities

18. The classified Financial Position Statement
Noncurrent Liabilities such as;
-Long term Loan
-Note Payable-long term
-Bond

19. Financial Statement Income Statement:- -Revenues -Expenses
-Profit/Loss

20. Income Statement Expenses Revenues Cost of Service xx
Revenues from Service
Salaries
Other revenues
Rent expense
Advertising Expenses
Depreciation Expense
Utilities Expenses
Bad debt
Net Profit
Total

21. Reversing Entries
Reversing entries reverse the effects of the adjusting entries
Such as
-Accrued Expense (Liabilities)
-Accrued Revenues (Assets)
-Prepaid Expense (Assets)
(If recorded Expense)
-Deferred Revenues (Liabilities)
(If recorded Revenues)

22. Reversing Entries Accrued Expense (Liabilities) Adjusted (Dec. 31)
Dr. Expense xx
Cr. Accrued Expense xx
Reversing (Jan 1)
Dr. Accrued expense xx
Cr. Expense xx

23. Reversing Entries Accrued Expense (Liabilities) Cash Payment (Feb 1)
Dr. Expense xx
Cr. Cash xx
To recorded payment

24. Reversing Entries Accrued Revenues (Assets) Adjusted (Dec. 31)
Dr. Accrued Revenues xx
Cr. Revenues xx
Reversing (Jan 1)
Dr. Revenues xx
Cr. Accrued Revenues xx

25. Reversing Entries Accrued Revenues (Assets) Cash Receivable (Feb 1)
Dr. Cash xx
Cr. Revenue xx

26. Reversing Entries Prepaid Expense (Assets) (Recorded Expense Only)
Adjusted (Dec. 31)
Dr. Prepaid Expense xx
Cr. Expense xx
Reversing (Jan 1)
Dr. expense xx
Cr. Prepaid Expense xx

27. Reversing Entries Deferred Revenues (Liabilities)
(Recorded Revenues Only)
Adjusted (Dec. 31)
Dr. Revenues xx
Cr. Deferred Revenues xx
Reversing (Jan 1)
Dr. Deferred Revenues xx
Cr. Revenues xx

28. Opening Entries
Jan. 1 Dr. Assets-Accounts name xx Cr. Liabilities- Accounts name xx Owner’s Equity xx To recorded opening entries

29. Opening Entries
Jan.1 Dr. Cash xx Account Receivable xx Note Receivable xx Supplies on hand xx Cr. Account Payable xx Note Payable xx Accrued Expense xx Long term loan xx John Capital xx To recorded opening entries

30. Thank you for your Attention Q & A
The End
Thank you for your Attention Q & A