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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 16-1 LESSON 16-1 Recording Adjusting Entries
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 16-1LESSON 16-1
Recording Adjusting Entries
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-1
ADJUSTING ENTRIES RECORDED ADJUSTING ENTRIES RECORDED FROM A WORK SHEETFROM A WORK SHEET
33
page 480
22 11 44 5566 77
1. Heading
2. Date
3. Identify the first adjustment
4. Account debited
5. Debit
6. Account credited
7. Credit
8. Continue down the Adjustments columns
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-1
ADJUSTING ENTRY FOR ALLOWANCE ADJUSTING ENTRY FOR ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTSFOR UNCOLLECTIBLE ACCOUNTS page 482
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-1
ADJUSTING ENTRY FOR ADJUSTING ENTRY FOR MERCHANDISE INVENTORYMERCHANDISE INVENTORY page 482
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-1
ADJUSTING ENTRY FOR SUPPLIESADJUSTING ENTRY FOR SUPPLIES——OFFICEOFFICE page 483
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-1
ADJUSTING ENTRY FOR SUPPLIESADJUSTING ENTRY FOR SUPPLIES——STORESTORE page 483
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-1
ADJUSTING ENTRY FOR ADJUSTING ENTRY FOR PREPAID INSURANCEPREPAID INSURANCE page 484
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-1
ADJUSTING ENTRY FOR DEPRECIATIONADJUSTING ENTRY FOR DEPRECIATION——OFFICE EQUIPMENTOFFICE EQUIPMENT page 484
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-1
ADJUSTING ENTRY FOR DEPRECIATIONADJUSTING ENTRY FOR DEPRECIATION——STORE EQUIPMENTSTORE EQUIPMENT page 485
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-1
ADJUSTING ENTRY FOR FEDERAL ADJUSTING ENTRY FOR FEDERAL INCOME TAXESINCOME TAXES page 485
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 16-2LESSON 16-2
Recording Closing Entries for Income Statement Accounts
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-2
THE INCOME SUMMARY ACCOUNTTHE INCOME SUMMARY ACCOUNT page 487
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-2
CLOSING ENTRY FOR ACCOUNTS WITH CLOSING ENTRY FOR ACCOUNTS WITH CREDIT BALANCESCREDIT BALANCES
1122
page 488
3. Debits to close
44
1. Heading
2. Date 4. Credit to Income Summary
3333
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-2
CLOSING ENTRY FOR INCOME STATEMENT CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCESACCOUNTS WITH DEBIT BALANCES
1122 44
page 489
3. Credits to close
1. Date
2. Account debited
4. Debit amount
33
33
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-2
SUMMARY OF CLOSING ENTRY FOR SUMMARY OF CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCESDEBIT BALANCES page 490
Bal. 209,960.00 Closing 209,960.00
(New Bal. zero)
Purchases
Adj. (mdse. inv.) 15,840.00 Closing (credit amounts) 500,253.10
Closing (debit accounts) 404,099.15 (New Bal. 80,313.95)
Income Summary
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-2
CLOSING ENTRY TO RECORD CLOSING ENTRY TO RECORD NET INCOMENET INCOME page 491
1122
33
3. Credit Retained Earnings
1. Date
2. Debit Income Summary
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-2
CLOSING ENTRY FOR DIVIDENDSCLOSING ENTRY FOR DIVIDENDS page 491
3. Credit Dividends
1. Date
2. Debit Retained Earnings
1122
33
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-2
COMPLETED CLOSING ENTRIES FOR A COMPLETED CLOSING ENTRIES FOR A CORPORATION RECORDED IN A JOURNALCORPORATION RECORDED IN A JOURNAL page 492
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 16-3LESSON 16-3
Preparing a Post-Closing Trial Balance
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-3
3. Balances of asset accounts
4. Balances contra asset, liability, and capital accounts
POST-CLOSING TRIAL BALANCEPOST-CLOSING TRIAL BALANCE
11
66
page 496
7. Double lines
6. Totals
5. Word Totals
2. Accounts that have balances
1. Heading
22
33
44
7755
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-3
ACCOUNTING CYCLE FOR A MERCHANDISING ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATIONBUSINESS ORGANIZED AS A CORPORATION
11
22
33
44
55
page 497
(continued on next slide)
1. Source documents are checked, and transactions are analyzed.
2. Transactions are recorded in journals.
3. Journal entries are posted to the accounts payable ledger, the accounts receivable ledger, and the general ledger.
4. Schedules of accounts payable and account receivable are prepared from the subsidiary ledgers.
5. A work sheet is prepared from the general ledger.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 16-3
ACCOUNTING CYCLE FOR A MERCHANDISING ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATIONBUSINESS ORGANIZED AS A CORPORATION
6. Financial statements are prepared.
page 497
(continued from previous slide)
66
77
88
99
9. A post-closing trial balance of the general ledger is prepared.
8. Adjusting and closing entries are posted to the general ledger.
7. Adjusting and closing entries are journalized from the work sheet.
