Yönetim Temelleri The Accounting Cycle © The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin The Accounting Cycle Capturing Economic Events Chapter 3© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Learning Objective LO1 To identify the steps in the accounting cycle and discuss the role of accounting records in an organization.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Accounting Cycle The sequence of accounting procedures ? used to record , classify , and summarize accounting information in financial reports at regular intervals is called the accounting cycle.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Journalize transactions. Post entries to the ledger accounts. Prepare trial balance. Make end-of- year adjustments. Prepare adjusted trial balance. Prepare financial statements. Prepare after-closing trial balance. Journalize and post closing entries. The Accounting Cycle© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Learning Objective LO2 To describe a ledger account and a ledger.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin The Ledger The entire group of accounts is kept together in an accounting record called a general ledger . Cash Accounts Payable Capital Stock Accounts are individual records showing increases and decreases .© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin The Use of Accounts An account has three elements: title, debit side and credit side Left or Debit Side Right or Credit Side Title of the Account The balance of an account is the difference between the debit and credit entries Increases are recorded on one side of the T- account, and decreases are recorded on the other side.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Let’s see how debits and credits are recorded in the Cash account for JJ’s Lawn Care Service.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Cash 5/1 8,000 5/2 2,500 5/25 75 5/8 2,000 5/29 750 5/28 150 5/31 50 5/31 4,125 Bal. Receipts are on the debit side. Payments are on the credit side. The balance is the difference between the debit and credit entries in the account. Debit and Credit Entries© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Learning Objective LO3 To understand how accounts are increased and decreased.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin A = L + OE ASSETS Debit for Increase Credit for Decrease EQUITIES Debit for Decrease Credit for Increase LIABILITIES Debit for Decrease Credit for Increase Debits and credits affect accounts as follows: Debit and Credit Rules© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Debits and Credits for Revenue and Expense EQUITIES Debit for Decrease Credit for Increase Expenses decrease owners’ equity. Revenues increase owners’ equity. EXPENSES Credit for Decrease Debit for Increase REVENUES Debit for Decrease Credit for Increase© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin EQUITIES Debit for Decrease Credit for Increase Payments to owners decrease owners’ equity. Owners’ investments increase owners’ equity. DIVIDENDS Credit for Decrease Debit for Increase Investments by and Payments to Owners CAPITAL STOCK Debit for Decrease Credit for Increase© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin RETAINED EARNINGS Dr. - Cr. + Debit and Credit Rules of EQUITY Accounts EXPENSES Dr. + Cr. - DIVIDENDS Dr. + Cr. - CAPITAL STOCK Dr. - Cr. + REVENUES Dr. - Cr. + R e t a i n e d E a r n i n g s© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Learning Objective LO4 To explain the double- entry system of accounting.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin A = L + OE Debit balances Credit balances = In the double-entry accounting system, every transaction is recorded by equal dollar amounts of debits and credits. Double Entry Accounting ???The Equality of Debits and Credits© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin In an actual accounting system, transactions are initially recorded in the journal . G E N E R A L J O U R N A L D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 1 C a s h x x x C a p i t a l S t o c k x x x O w n e r s i n v e s t c a s h i n t h e b u s i n e s s . The Journal© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Posting involves copying information from the journal to the ledger accounts. Posting Journal Entries to the Ledger Accounts© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin G E N E R A L J O U R N A L D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 1 C a s h 8 , 0 0 0 C a p i t a l S t o c k 8 , 0 0 0 O w n e r s i n v e s t c a s h i n t h e b u s i n e s s . G e n e r a l L e d g e r C a s h D a t e D e b i t C r e d i t B a l a n c e 2 0 0 7 M a y 1 8 , 0 0 0 8 , 0 0 0 Posting Journal Entries to the Ledger Accounts© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin G E N E R A L J O U R N A L D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 1 C a s h 8 , 0 0 0 C a p i t a l S t o c k 8 , 0 0 0 O w n e r s i n v e s t c a s h i n t h e b u s i n e s s . G e n e r a l L e d g e r C a p i t a l S t o c k D a t e D e b i t C r e d i t B a l a n c e 2 0 0 7 M a y 1 8 , 0 0 0 8 , 0 0 0 Posting Journal Entries to the Ledger Accounts© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin G E N E R A L J O U R N A L D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 2 T o o l s & E q u i p m e n t 2 , 5 0 0 C a s h 2 , 5 0 0 P u r c h a s e d l a w n m o w e r . Let’s see what the cash account looks like after posting the cash portion of this transaction for JJ’s Lawn Care Service. Posting Journal Entries to the Ledger Accounts© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin G e n e r a l L e d g e r C a s h D a t e D e b i t C r e d i t B a l a n c e 2 0 0 7 M a y 1 8 , 0 0 0 8 , 0 0 0 2 2 , 5 0 0 5 , 5 0 0 This ledger format is referred to as a running balance . Ledger Accounts After Posting© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin G e n e r a l L e d g e r C a s h D a t e D e b i t C r e d i t B a l a n c e 2 0 0 7 M a y 1 8 , 0 0 0 8 , 0 0 0 2 2 , 5 0 0 5 , 5 0 0 T accounts are simplified versions of the ledger account that only show the debit and credit columns. Ledger Accounts After Posting© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Let’s record selected transactions for JJ’s Lawn Care Service in the accounts. © The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 1: Jill Jones and her family invested $8,000 ? in JJ’s Lawn Care Service and received 800 shares of stock. G E N E R A L J O U R N A L D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 1 C a s h $ 8 , 0 0 0 C a p i t a l S t o c k $ 8 , 0 0 0 O w n e r s i n v e s t c a s h i n t h e b u s i n e s s .© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin C a p i t a l S t o c k 5 / 1 8 , 0 0 0 Cash 5/1 8,000 May 1: Jill Jones and her family invested $8,000 ? in JJ’s Lawn Care Service and received 800 shares of stock. Cash increases $8,000 with a debit. Capital Stock increases $8,000 with a credit.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 2: JJ’s purchased a riding lawn mower ? for $2,500 cash. D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 2 T o o l s & E q u i p m e n t $ 2 , 5 0 0 C a s h $ 2 , 5 0 0 P u r c h a s e o f e q u i p m e n t© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 2: JJ’s purchased a riding lawn mower ? for $2,500 cash. Tools & Equipment 5/2 2,500 Cash 5/1 8,000 5/2 2,500 Cash decreases $2,500 with a credit. Tools & Equipment increases $2,500 with a debit.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 8: JJ’s purchased a $15,000 truck. JJ’s ? paid $2,000 in cash and issued a note payable for the remaining $13,000. D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 8 T r u c k $ 1 5 , 0 0 0 C a s h $ 2 , 0 0 0 N o t e s p a y a b l e $ 1 3 , 0 0 0 P u r c h a s e s o f t r u c k© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 8: JJ’s purchased a $15,000 truck. JJ’s ? paid $2,000 in cash and issued a note payable for the remaining $13,000. Truck 5/8 15,000 Cash 5/1 8,000 5/2 2,500 5/8 2,000 Notes Payable 5/8 13,000 Truck increases $15,000 with a debit. Cash decreases $2,000 with a credit. Notes Payable increases $13,000 with a credit.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 11: JJ’s purchased some repair parts for ? $300 on account. G E N E R A L J O U R N A L D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 1 1 T o o l s & E q u i p m e n t $ 3 0 0 A c c o u n t s p a y a b l e $ 3 0 0 P u r c h a s e s o f e q u i p m e n t© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 11: JJ’s purchased some repair parts for ? $300 on account. Tools & Equipment increases $300 with a debit. Accounts Payable increases $300 with a credit. Tools & Equipment 5/2 2,500 5/11 300 A c c o u n t s P a y a b l e 5 / 1 1 3 0 0 © The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 18: JJ’s sold half of the repair parts to ? ABC Lawns for $150, a price equal to JJ’s cost. ABC Lawns agrees to pay JJ’s within 30 days. D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 1 8 A c c o u n t s r e c e i v a b l e $ 1 5 0 T o o l s & E q u i p m e n t $ 1 5 0 S a l e o f e q u i p m e n t© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 18: JJ’s sold half of the repair parts to ? ABC Lawns for $150, a price equal to JJ’s cost. ABC Lawns agrees to pay JJ’s within 30 days. Tools & Equipment decreases $150 with a credit. Accounts Receivable increases $150 with a debit. Tools & Equipment 5/2 2,500 5/18 150 5/11 300 Accounts Receivable 5/18 150 © The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 29: JJ’s provided lawn care services for ? a client and received $750 in cash. D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 2 9 C a s h $ 7 5 0 S a l e s r e v e n u e $ 7 5 0 S a l e s r e v e n u e e a r n e d© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin S a l e s R e v e n u e 5 / 2 9 7 5 0 May 29: JJ’s provided lawn care services for ? a client and received $750 in cash. Cash increases $750 with a debit. Sales Revenue increases $750 with a credit. C a s h 5 / 1 8 , 0 0 0 5 / 2 2 , 5 0 0 5 / 2 9 7 5 0 5 / 8 2 , 0 0 0 © The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 31: JJ’s purchased gasoline for the lawn ? mower and the truck for $50 cash. D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 3 1 G a s o l i n e e x p e n s e $ 5 0 C a s h $ 5 0 G a s o l i n e e x p e n s e i n c u r r e d© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Gasoline Expense 5/31 50 May 31: JJ’s purchased gasoline for the lawn ? mower and the truck for $50 cash. Cash decreases $50 with a credit. Gasoline Expense increases $50 with a debit. C a s h 5 / 1 8 , 0 0 0 5 / 2 2 , 5 0 0 5 / 2 9 7 5 0 5 / 8 2 , 0 0 0 5 / 3 1 5 0 © The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin May 31: JJ’s Lawn Care paid Jill Jones and ? her family a $200 dividend. D a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n P R D e b i t C r e d i t 2 0 0 7 M a y 3 1 D i v i d e n d s $ 2 0 0 C a s h $ 2 0 0 D i v i d e n d p a i d© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin D i v i d e n d s 5 / 3 1 2 0 0 May 31: JJ’s Lawn Care paid Jill Jones and ? her family a $200 dividend. Cash decreases $200 with a credit. Dividends increase $200 with a debit. C a s h 5 / 1 8 , 0 0 0 5 / 2 2 , 5 0 0 5 / 2 9 7 5 0 5 / 8 2 , 0 0 0 5 / 3 1 5 0 5 / 3 1 2 0 0 © The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Learning Objective LO9 To prepare a trial balance and explain its uses and limitations.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Trial Balance A trial balance is a two-column schedule ? listing the names and balances of all the accounts in the order in which they appear in the ledger. The debit balances are listed in the left ? column and credit balances are in the right column. The totals of the two columns should be ? equal.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Now, let’s look at the Trial Balance for JJ’s Lawn Care Service for the month of May.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin J J ' s L a w n C a r e S e r v i c e U n a d j u s t e d T r i a l B a l a n c e M a y 3 1 , 2 0 0 7 C a s h 4 . 0 0 0 $ A c c o u n t s r e c e i v a b l e 1 5 0 T o o l s & e q u i p m e n t 2 . 6 5 0 T r u c k 1 5 . 0 0 0 N o t e s p a y a b l e 1 3 . 0 0 0 $ A c c o u n t s p a y a b l e 3 0 0 C a p i t a l s t o c k 8 . 0 0 0 D i v i d e n d s 2 0 0 S a l e s r e v e n u e 7 5 0 G a s o l i n e e x p e n s e 5 0 T o t a l 2 2 . 0 5 0 $ 2 2 . 0 5 0 $ All balances are taken from the ledger accounts on May 31. You may notice from the balances presented that JJ’s Lawn Care Service had transactions in May other than those presented on the preceding slides. Proves equality of debits and credits.© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Brief Exercises 3.2, 3.3, 3.4, 3.5 ? Exercises 3.3, 3.10 ? Problem 3.5A ?© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin End of Chapter 3