1. Ass. Prof. Dr. Tuğba DENİZ Department of Forestry Economics
ORM324 Muhasebe Ders Notu
ACCOUNTING (5th week)
Ass. Prof. Dr. Tuğba DENİZ Department of Forestry Economics
Yrd. Doç. Dr. Güven KAYA

2. Titles Accounting period Beginning of period transactions
Current term transactions
End of period transactions
Recording accounting transactions
Current Assets
Liquid Assets
Cash
Cheques Received
Bank (Cash in Banks)
Cheques Issued and Payment Orders (-)

3. Accounting Period
Businesses maintain their activities endlessly, regardless of the duration required by the continuity principle. However, in order to demonstrate the success of businesses; it is necessary to identify, measure and report the results of financially formed transactions within each period as of the end of the period with the help of financial statements. It is also a requirement of the periodicity principle that the infinite life of business is divided into certain periods and the success status is revealed.

4. Accounting transactions are recorded for an accounting period in accordance with the periodicity principle.
An accounting period begins on January 1, and ends on December 31 of the same year.
In the case of a newly established business, the beginning of the period is the date of establishment.
The beginning date of the establishment may not be 01 January. But the period must be ended on December 31.

5. Accounting Period
At the end of the period, the balance sheet will also be the balance sheet at the beginning of the following period. Transactions are not independent of each other. They all form the accounting process as a whole.

6. Transactions to be made in an accounting period***
Beginning of term inventory and record inventory register
Openning balance sheet
Openning entry in the journal and record transactions in journal
Post to ledger accounts
Monthly trial balance
General trial balance
Year-end inventory and adjustment records
Adjusted trial balance
Closing balance sheet and Income statement
Year end closing entry in the journal and closing accounts in ledger

7. Transactions to be made in an accounting period
OPENING TRANSACTIONS (Beginning of period)
CURRENT TERM TRANSACTIONS (Mid period)
ADJUSTING PROCESS (End of Period)

8. CURRENT TERM TRANSACTIONS
OPENING TRANSACTIONS
Opening Inventory
Opening balance sheet
Opening entry in the journal and record transactions in the ledger
CURRENT TERM TRANSACTIONS
Recording transactions in journal
Post to ledger accounts
Monthly trial balance
ADJUSTING PROCESS
General trial balance
Year-end inventory and adjustment records
Adjusted trial balance
Closing balance sheet and Income statement
Year end closing entry in the journal and closing accounts in ledger

9. Opening the accounts
In a business, the status of the beginning of the period and the opening balance must be transferred to the accounts. Recording to the journal the status in the opening balance sheet is called «opening the accounts»
The opening of accounts is for both newly established and ongoing businesses.
Inventory is to determine precisely the assets and liabilities in the balance sheet by counting, measuring, weighing and evaluating. The inventory made on the day of commencement work is recorded in the inventory book.

10. X Company was established on 01. 04. 2017
X Company was established on The inventory of the Company's assets dated is as follows:
Assets:
Cash TL
Bank TL
A Bank : TL
B Bank : TL
C Bank : TL
Buyers TL
Person A : TL
Person B : TL
Furniture and Fixtures TL
Table (3 pieces) TL
Seat (3 pieces) TL
Steel cupboard (2 pieces): 250 TL
Cash register (1 piece) : 350 TL
Computer (3 pieces) :3.000 TL
Phone (6 pieces) :1.900 TL
Building TL

11. According to the information provided, how does the business’establishment balance sheet be arranged?
The made inventory is recorded in the inventory book.
The capital is calculated and the balance sheet is arranged.
Active = Passive
                  Assets = Liabilities + Owner’s Equity
Cash + Bank + Buyers + Buildings + Furniture and Fixtures = Capital
100, , , , = 888,000TL

12. Establishment Balance Sheet of Company X
Active Passive
Cash
Capital
Bank
Buyers
80.000
Buildings
Furniture and Fixtures
8.000
Active’s Total
Passive’s Total

13. The establishment balance sheet is recorded as a opening entry in the journal. Active accounts are debited and liabilities are credited. According to this, the opening record in the journal is as follows:

15. Opening Accounts in ongoing businesses
In ongoing businesses, accounting period begins on January 1 and ends on December 31st.
The closing balance sheet of the ongoing businesses at the end-of period is the opening balance sheet at the beginning of the period.
In balance sheets of ongoing businesses, there are a greater number of assets, capital and liabilities than the balance sheets of newly established businesses

16. Closing Balance Sheet of Business A 31.12.2016
(TL)
ACTIVE
PASSIVE
1. CURRENT ASSETS
Cash
Bank
Notes Receivables
Commercial Goods
2. FIXED ASSETS
Lands
Furniture&Fıxtures
Vehicles
3. SHORT-TERM LIABILITIES
Bank Loans
Notes Payables
4. LONG-TERM LIABILITIES
Notes Payable
5. OWNER’S EQUITY
Capital
Undistributed profits
Total’s of Passives
Total’s of Actives

17. Recording to the Journal
First entry in the journal is record of the opening balance sheet.
After that, all transactions are recorded to the journal in the forms of items in the order of date.

18. Recording to the Ledger
The accounting entries made in the journal are then passed to the ledger book.
For each account in the journal, a separate ledger account is opened.

19. Monthly Trial Balance
Monthly trial balance is arranged to check the accuracy of the transfers from the journal to the ledger.
In the monthly trial balance, the totals of debits and credits must be equal to each other.
At the same time, it should be equal to the debt and credit sides of the journal.

20. General Trial Balance
As of December 31, general trial balance is set up to control the debit-credit balance of accounts and the accuracy of the transfers from the journal to the ledger within twelve months.

21. Year-end inventory and adjustment records
At the end of the term, the actual situation must be determined. For this purpose, the inventory of the assets and liabilities of the business is taken at the end of the period.

22. Adjusted Trial Balance
Adjusted trial balance shows the actual size of assets and liabilities of business.

23. Closing balance sheet and Income statement
By using the rest of the adjusted trial balance, closing balance sheet of the business showing the financial status at the end of the period is prepared.
*****The rest of the adjusted trial balance forms the closing balance sheet*****.

24. Year end closing entry in the journal and closing accounts in ledger
After arranging the opening balance sheet, all accounts must be closed to end the period.
At the end of the period, debit accounts are credited by the remaining amount and credit accounts are debited by remaining amount.

25. Opening accounts for new period
While 31 December is the end of the accounting period, January 1 is the beginning of the accounting period. For this reason, the status of the business at the end of the period is the initial status of the following period.
The new accounting period starts with the opening entry based on opening balance sheet.

26. RECORDING TRANSACTIONS:
“LIQUID ASSETS”

27. BALANCE SHEET 1.CURRENT ASSETS 3.SHORT-TERM LIABILITIES
10 LIQUID ASSETS
11 SECURITIES
12 TRADE RECEIVABLES
13 OTHER RECEIVABLES
15 STOCKS
18 PREPAID EXPENSES
19OTHER CURRENT ASSETS
4. LONG-TERM LIABILITIES
2. FIXED ASSETS
5. OWNER’S EQUITY
6. Income Statement Accounts
7.Cost Accounts
8. …
9. Memorandum Accounts

28. 1 Current Assets (account class) 10 Liquid Assets (account group) 100 Cash (main account-ledger account) 101 Cheques Recevied (main account-ledger account) 102 Bank (main account-ledger account) ….. 11 Securities (account group) 2. Fixed Assets (account class)

29. Current Assets are the assets that are acquired in cash or in the bank and are considered to be converted into a currency within one year. Current assets are constantly changing and working.
1. CURRENT ASSETS
10 LIQUID ASSETS
11 SECURITIES
12 TRADE RECEIVABLES
13 OTHER RECEIVABLES
15 STOCKS
18 PREPAID EXPENSES
19 OTHER CURRENT ASSETS

30. LIQUID ASSETS
Liquid assets include assets held in cash or in banks and assets that are convertible into money without loss of value when requested (excluding securities).
100 CASH
101 CHEQUES RECEIVED
10 LIQUID ASSETS
102 BANK
103 CHEQUES GIVEN AND PAYMENT ORDERS ( - )
108 OTHER LIQUID ASSETS

31. CASH ACCOUNT
Cash account is the account where monetary transactions of business are recorded.
Cash account is placed on the top line of the active part of the balance sheet. Because it represents the source which any obligation can be paid immediately.

32. D
Cash C + --
Cash account is an account with an active character, in which money input and output are monitored. Money deposits are posted on the debt side of Cash Account to create an increase in cash deposits. Cash outflows are recorded on the receivable side of the cash account as they will create a decrease in cash deposits.

33. The safe account usually gives a debit residual or does not give anything residual.
The residual of the account shows the amount of money in Cash. If the account does not any residuals, it means that there is no money in Cash.

34. 185.000 D CAPITAL C 100.000 D CASH C 85.000 D COMMERCIAL GOODS C
EXAMPLE: Ahmet Kısa established Company A by putting as a capital TL and commercial goods of TL.
_____________ __________________
CASH
COMMERCIAL GOODS
CAPITAL
_____________ … /… /….. __________________
....
D CAPITAL C
....
D CASH C
85.000
....
D COMMERCIAL GOODS C

35. Commercial Goods Account is used for good purchases
important!!
Commercial Goods Account is used for good purchases
Domestic Sales Account is used for good sales

36. The company selled goods of 7. 500 TL in cash in 29. 10. 2017 (V. A
The company selled goods of TL in cash in (V.A.T of 500 TL included)
_____________ ______________
CASH
DOMESTIC SALES.
CALCULATED V.A.T.
_____________ __________________
7.000-
500.-
7.000
D DOMESTIC SALES C
7.500
16.000
D CASH C
D CALCULATED V.A.T C
500

37. The Company purchased commercial goods of 3. 000+300 V. A. T. TL in 30
_____________ _____________
COMMERCIAL GOODS
V.A.T. TO BE REDUCED
CASH
300.-
7.500
16.000
25.000
3.300
D CASH C
D COMMERCIAL GOODS C
3.000
D V.A.T TO BE REDUCED C
300

38. The company invested money of 25. 000 TL. to the bank in 30.10.2017.
_______ ________________
BANK
CASH
_____________ _________________
D CASH C
7.500
16.000
25.000
D BANK C
25.000

39. The company purchased a computer of 1.000 TL in cash in 31.10.2013.
_____________ _________________
FURNITURE & FIXTURES
CASH
_____________ __________________
D CASH C
D FURNITURE & FIXTURES C
1.000
7.500
16.000
25.000
3.300
1.000

40. CHEQUES RECEIVED ACCOUNT
Cheques Received Account is an active account.
Cheques received are recorded on the debit side of the account.

41. Example: The company took a cheque received in exchange for receivable without note of 500 TL in
_________ _________
CHEQUES RECEIVED
BUYERS
-Taking a chegue of 500 TL-
500.-

42. Example: The company collected the cheque of 500 TL in 20.02.2017.
____________ ________________
CASH
CHEQUES RECEIVED
500.-

43. BANK ACCOUNT
In the Uniform Chart of Accounts, value movements in the bank are monitored in Banks accounts.
This account enables that the business can monitor the money deposited and withdrawn to domestic and foreign banks and similar financial institutions.

44. Example: The company withdrawn money of 300 TL from the bank in 23. 02
_____________ ________________
CASH
BANK
Withdrawing money from the bank
300.-

45. CHEQUES ISSUED and PAYMENT ORDERS ACCOUNT (-)
When a cheque and payment order is given to a person, it is recorded credit side of this account. If a cheque and payment orders are collected from the bank, this account will be debited.
Cheques Issued and Payment Orders is a passive and temporary account.
This account shows the amount of unpaid by bank. So, it is placed in the form a discount (-) in the Liqued Assets Group.

46. EXAMPLE: The Company gave a cheque of 470 TL for payable to Mastaş Company in 05.03.2017.
_____________ _________________
ACCOUNTS PAYABLE
CHEQUES ISSUED AND PAYMENT ORDERS
470.-

47. EXAMPLE: The cheque was collected from the Bank by Mastaş Company.
_____________ _______
CHEQUES ISSUED AND PAYMENT ORDERS
BANK
470.-

48. Closing Balance Sheet of Business A
(TL)
LIQUID ASSETS
CASH
CHEQUES RECEIVED
BANK
CHEQUES ISSUED and
PAYMENT ORDERS (-)

49. References
“Genel Muhasebe”, Prof. Dr. Ahmet Türker, İstanbul Üniversitesi Orman Fakültesi Yayınları , İstanbul 2012.
“Genel Muhasebe”, Ümit Ataman, Türkmen Kitabevi, 7. Basım, İstanbul, 2007.
“Genel Muhasebe”, Anadolu Üniversitesi Yayınları, 2. Baskı, Eskişehir, 2003.
“Finansal Muhasebe ve Tekdüzen Muhasebe Sistemi”, Cengiz Erdamar ve Feryal Orhon Basık, Türkmen Kitabevi, Yenilemiş 3. Baskı, İstanbul, 2017.
«Accounting: the Basis for Business Decisions», Tenth Edition, Meigs&Meigs, Bettner, Whittington, 1996