Information Engineering in India dealing with the newspaper and other materials to help pptx

Acquired thru Manchester Manifestation

1. Chapter 7: Completing the Accounting Cycle for a Service Provider

2. Gather data based on various documents or business papers. Analyze and record the documents in a book called the journal. Classify and post from the journal to another book called the ledger. Classify and post from the journal to another book called the ledger. Extract the balances of the accounts in the general ledger and prepare a trial balance. ACCOUNTING CYCLE

3. 5. Gathering and journalizing the adjustments. 6. Posting the adjusting entries. 7. Preparing the adjusted trial balance ACCOUNTING CYCLE

4. TIME PERIOD ASSUMPTION Calendar Accounting Period Fiscal Accounting Period

5. TIMING ISSUES Example: One year insurance paid in advance on March 1, 2018, should be expensed only for 10 months in 2018 (March to December) and for 2 months in 2019 (January and February ) A consultancy job for 3 months which started Dec 1, 2018 was billed only in Feb 2019 for P30,000 after the job was finished.

6. ACCRUAL PRINCIPLE recording of assets, liabilities, revenues or expenses at the time the transaction took place regardless of when cash is paid or collected. Example : If you buy an equipment today to be paid after 3 months, the equipment should be recorded today even if it still unpaid.

7. ADJUSTING ENTRIES Journal entries needed to update accounts and ensure accuracy of information presented in the FS. Examples: Supplies purchased and recorded as asset must be expensed for the used up portion. Unpaid utility bills from Meralco and PLDT must be expensed as incurred. Cash received in advance from customers recorded as liability must be recorded as income the moment service has been rendered. Tangible assets used in the operation but which will become obsolete or worn out must be depreciated.

8. ACCRUED INCOME & ACCRUED EXPENSE HEALTHWAY CLINIC :

9. ACCRUED INCOME & ACCRUED EXPENSE MADRIGAL REALTY:

10. ACCRUED INCOME & ACCRUED EXPENSE HEALTHWAY CLINIC:

11. ACCRUED INCOME & ACCRUED EXPENSE RP FINANCE:

12. ACCRUED INCOME & ACCRUED EXPENSE

13. PREPAID EXPENSE Opposite of accrued expense Represents an advance payment for an expense to be used up. TWO METHODS USED IN RECORDING ADVANCE PAYMENT OF EXPENSES : Asset Method Expense Method

14. ADJUSTING ENTRY:

15. UNEARNED INCOME Advance collection from the clients or customers TWO METHODS USED IN RECORDING ADVANCE COLLECTIONS: Liability Method Income Method

16. ADJUSTING ENTRY:

17. BAD DEBTS Losses from uncollectible accounts TWO METHODS USED IN RECOGNIZING BAD DEBTS: Direct write off method Allowance method

18. DIRECT WRITE OFF METHOD Recognizes bad debts expense only when it is certain that the company will not be able to collect the account anymore.

19. DIRECT WRITE OFF METHOD

20. DIRECT WRITE OFF METHOD

21. ALLOWANCE METHOD This method follows the matching principle which recognizes bad debts or doubtful accounts at the time service is rendered.

22. ALLOWANCE METHOD

23. ALLOWANCE METHOD

24. ALLOWANCE METHOD

25. ALLOWANCE METHOD

26. DEPRECIATION The recognition of part of the asset as an expense because of its decreasing utility value.

27. DEPRECIATION

28. DEPRECIATION

29. DEPRECIATION

30. WORKSHEET A columnar paper where the first 2 columns are provided for the trial balance. The next 2 columns are for the adjustments and from which adjusted balances are determined. From the adjusted balances, the income statement and the balance sheet are prepared.

31. WORKSHEET

32. Computation: 1. 10% x P49,000= P4,900 AJE: DAE 4,900 ADAE 4,900

33. Computation: 2. P15,000 * 4/6 = P10,000 AJE: Insurance Expense 10,000 Prepaid Insurance 10,000

34. Computation: 3. P600-200 = P400 AJE: Supplies Expense 400 Prepaid Supplies 400

35. Computation: 4. (P30,000 * 12%)* 45/360 = P450 AJE: Interest Receivable 450 Interest Income 450

36. Computation: 5. P150,000 – P50,000 -------------------------- = P10,000 per year 10 P10,000 * 9/12 = P7,500 AJE: Depreciation Expense 7,500 Accumulated Depreciation 7,500

37. Computation: 6. P25,000 – P2,500 -------------------------- = P2,250 per year 10 AJE: Depreciation Expense 2,250 Accumulated Depreciation 2,250

38. Computation: 7.( P50,000 * 18% ) * 30/360 = P750 AJE: Interest Expense 750 Interest Payable 750

39. Computation: 8. P50,000 * 3% = P1,500 AJE: Taxes & Licenses Fee 1,500 Taxes Payable 1,500