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ACC 300 · Meeting 2 · Thu 9/3

Adjusting the records at period end

37 slides · Unit 1 · Optional Kieso: Chapter 1, sections 1.1-1.2; Chapter 2, sections 2.1-2.4 · Meeting overview

Lecture

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  1. Slide 1. Before-class trivia
  2. Slide 2. Adjusting the records at period end
  3. Slide 3. The reporting system and the accounting cycle
  4. Slide 4. Learning objective for this meeting
  5. Slide 5. Adjusting entries update the records before reporting
  6. Slide 6. Are Red Cedar’s June 30 records ready?
  7. Slide 7. Red Cedar’s June 30 balances are not ready
  8. Slide 8. US GAAP requires accrual accounting
  9. Slide 9. Common reasons adjusting entries are required
  10. Slide 10. Determine the adjustment from required and recorded balances
  11. Slide 11. Timing adjustments have four patterns
  12. Slide 12. Accrued revenue: service comes before cash
  13. Slide 13. iClicker question 1 of 5
  14. Slide 14. iClicker answer 1 of 5
  15. Slide 15. Record the revenue and receivable on June 30
  16. Slide 16. Earned refers to the applicable revenue-recognition requirements
  17. Slide 17. Unearned revenue: cash comes before service
  18. Slide 18. Cash can arrive before Red Cedar earns revenue
  19. Slide 19. From Class 1: record cash received before performance
  20. Slide 20. Record the $1,500 earned by June 30
  21. Slide 21. Prepaid expense: cash comes before resource use
  22. Slide 22. iClicker question 2 of 5
  23. Slide 23. iClicker answer 2 of 5
  24. Slide 24. Accrued expense: service comes before cash
  25. Slide 25. Payroll timing leaves June wages unrecorded
  26. Slide 26. iClicker question 3 of 5
  27. Slide 27. iClicker answer 3 of 5
  28. Slide 28. Some period-end entries require allocation or estimation
  29. Slide 29. Depreciation combines a recorded cost with estimated inputs
  30. Slide 30. iClicker question 4 of 5
  31. Slide 31. iClicker answer 4 of 5
  32. Slide 32. iClicker question 5 of 5
  33. Slide 33. iClicker answer 5 of 5
  34. Slide 34. Apply the omission analysis to accrued revenue
  35. Slide 35. Omitted revenue understates assets and net income
  36. Slide 36. Prepare adjustments and analyze omissions
  37. Slide 37. Statements and closing entries

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Contents

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Place adjusting entries in the accounting cycle Slides 1–5

  1. 1 Before-class trivia
  2. 2 Adjusting the records at period end
  3. 3 The reporting system and the accounting cycle
  4. 4 Learning objective for this meeting
  5. 5 Adjusting entries update the records before reporting

See why equal totals can contain outdated balances Slides 6–10

  1. 6 Are Red Cedar’s June 30 records ready?
  2. 7 Red Cedar’s June 30 balances are not ready
  3. 8 US GAAP requires accrual accounting
  4. 9 Common reasons adjusting entries are required
  5. 10 Determine the adjustment from required and recorded balances

Sort the four timing patterns Slides 11–16

  1. 11 Timing adjustments have four patterns
  2. 12 Accrued revenue: service comes before cash
  3. 13 iClicker question 1 of 5
  4. 14 iClicker answer 1 of 5
  5. 15 Record the revenue and receivable on June 30
  6. 16 Earned refers to the applicable revenue-recognition requirements

Work a cash-first adjustment Slides 17–23

  1. 17 Unearned revenue: cash comes before service
  2. 18 Cash can arrive before Red Cedar earns revenue
  3. 19 From Class 1: record cash received before performance
  4. 20 Record the $1,500 earned by June 30
  5. 21 Prepaid expense: cash comes before resource use
  6. 22 iClicker question 2 of 5
  7. 23 iClicker answer 2 of 5

Work an activity-first adjustment Slides 24–27

  1. 24 Accrued expense: service comes before cash
  2. 25 Payroll timing leaves June wages unrecorded
  3. 26 iClicker question 3 of 5
  4. 27 iClicker answer 3 of 5

Use a supported estimate for depreciation Slides 28–31

  1. 28 Some period-end entries require allocation or estimation
  2. 29 Depreciation combines a recorded cost with estimated inputs
  3. 30 iClicker question 4 of 5
  4. 31 iClicker answer 4 of 5

Trace an omitted adjustment Slides 32–36

  1. 32 iClicker question 5 of 5
  2. 33 iClicker answer 5 of 5
  3. 34 Apply the omission analysis to accrued revenue
  4. 35 Omitted revenue understates assets and net income
  5. 36 Prepare adjustments and analyze omissions

Connect the method to the objective Slides 37–37

  1. 37 Statements and closing entries