Accounting For Managers

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Accounting For Managers"

Transcription

1 Accounting For Managers Professor ZHOU Ning SCHOOL OF ECONOMICS AND MANAGEMENT BEIHANG UNIVERSITY

2 Chapter 4 Accounting Records and Systems

3 The objectives of chapter 4 Recording fundamentals The accounting process Transaction analysis The adjusting and closing process Accounting systems 4-3

4 Recording fundamentals Why learn basic record keeping procedures? Accounting is best learned by doing. Debit-credit mechanism, the principal technique, provides an analytical framework. 4-4

5 The Account Device used for calculating net change Simplest form is T-account. Increases listed on one side; decreases listed on other side. Balanced periodically. 4-5

6 Sample of T-account. 4-6

7 Permanent Accounts = real accounts = balance sheet accounts. Reported on balance sheet. Carried forward into next period: In this sense, they are permanent. 4-7

8 Temporary Accounts Revenue and expense accounts. Details of income statement and changes in retained earnings (RE). Helps summarize operating activity, such as sales revenue, COGS, selling expenses. Avoids cluttering RE account. At end of accounting period, amounts are totaled, combined and transferred to RE. Balances at beginning of each period are

9 General Ledger Ledger is a group of accounts. General ledger contains all accounts. Some accounts may be in summary form. E.g. accounts receivable, inventory, fixed assets. Detail or subsidiary ledgers kept for above. 4-9

10 Chart of Accounts List of all accounts, cash at beginning and RE at the end (p14, illustration1-3). Numbers assigned to accounts to make summaries for Balance Sheet and Income Statement easier. Minimum # is # of BS and IS lines. Usually many more. Management determines # of accounts based on information needs (p360, exhibit 2). May be several levels of detail. Can view as building blocks summarized in various ways. 4-10

11 Debit and Credit Left hand side (LHS) of an account arbitrarily called debit side. RHS is credit side. To debit or charge (credit) means to make an entry to LHS (RHS). For each transaction: Dr./dr. (debit) = Cr./cr. (credit) Assets = Liabilities + Owners Equity Thus double entry bookkeeping. 4-11

12 Rules for Dr. and Cr. Asset accounts: Increases on LHS (Dr.) Decreases on RHS (Cr.) Liability and OE accounts: Necessarily the opposite to maintain fundamental accounting equation: Increases on RHS (Cr.) Decreases on LHS (Dr.) 4-12

13 Rules for Dr. and Cr. (Con.) Revenue and expense accounts can be viewed as part of Retained Earnings or Owners Equity. Since revenues increase RE and expenses decrease RE: Revenue (& RE) accounts Increases on RHS (Cr.) Decreases on LHS (Dr.) Expense accounts Increases on LHS (Dr.) Decreases on RHS (Cr.) 4-13

14 Rules for Dr. and Cr. (Con.) Assets Liabilities Owners Equity Debit Credit = Debit Credit + Debit Credit

15 Rules for Dr. and Cr. (Con.) Accounting Equation Assets = Liabilities + Shareholders Equity Or Assets = Liabilities + (Contributed Capital + Retained Earnings Dividends + Revenue Expenses ) 4-15

16 Accounting Process or Accounting Cycle 1. Analysis of transactions (Judgment) 2. Journalize original entries (Mechanical) 3. Post from journal to ledger (Mechanical) 4. Make adjusting entries (Judgment) Ending balance sheet account balances from step 6 become beginning balances for repetition of the cycle in the next accounting period. 5. Journalize and post closing entries (Mechanical) 6. Prepare financial statements (Judgment) 4-16

17 Transaction Analysis Assets = Liabilities + Owners Equity Dr. = Cr. or, Cr. = Dr. Record which ever half of entry is more obvious. Example entry for Owner contributing $5,000 cash for stock: Cash 5,000 + Paid-in-capital 5,

18 Balancing Accounts & Trial Balance Original entries: Obvious: checks written, sales made, etc. Trial balance. List of all accounts & amounts; separate columns for dr. and cr. Shows equality of dr. and cr. Still could be errors, why? Convenient for making adjusting entries and preparing financial statements (BS & IS). 4-18

19 Balancing Accounts & Trial Balance Eg. P86-89 Original entries 1. Owner invests $5,000 in Business 1. Dr. cash 5,000 Cr. Paid-in-capital 5,000 Cash (1) 5,000 Paid-in-Capital (1) 5,

20 Balancing Accounts & Trial Balance 2. Firm Pays $750 for Rent 2. Dr. Prepaid expense 750 Cr. cash 750 Cash (1) 5,000 (2) 750 Prepaid Expense (2)

21 Balancing Accounts & Trial Balance 3. Firm borrowed $4,000 from a bank on a 9% note payable, with interest payable quarterly and the principal due in full at the end of two years. 3. Dr. cash 4,000 Cr. Notes payable 4,000 Cash (1) 5,000 (2) 750 (3) 4,000 Notes payable (3) 4,

22 Balancing Accounts & Trial Balance 4. Equipment costing $7,200 was purchased for cash. The expected life of the equipment was 10 years. 4. Dr. Equipment 7,200 Cr. cash 7,200 Cash (1) 5,000 (2) 750 (3) 4,000 (4) 7,200 Equipment, at Cost (4) 7,

23 Balancing Accounts & Trial Balance 5. An additional inventory of pizza ingredients and boxes was purchased on credit for $ Dr. inventory 800 Cr. Account payable 800 (5) 800 Inventory Accounts payable (5)

24 Balancing Accounts & Trial Balance 6. In August pizza sales were $12,000, all for cash. 6. Dr. cash 12,000 Cr. Sales revenue 12,000 Cash (1) 5,000 (2) 750 (3) 4,000 (6) 12,000 (4) 7,200 Sales revenue (6) 12,

25 Balancing Accounts & Trial Balance 7. During August the pizzeria s employees were paid $3,000 in wages. 7. Dr. Wage expense 3,000 Cr. cash 3,000 Cash (1) 5,000 (2) 750 (3) 4,000 (4) 7,200 (6) 12,000 (7) 3,000 Wage expense (7) 3,

26 Balancing Accounts & Trial Balance 8. During the month, an additional $5,750 of ingredients and boxes was purchased on credit. 8. Dr. inventory 5,750 Cr. Account payable 5,750 (5) 800 (8) 5,750 Inventory Accounts payable (5) 800 (8) 5,

27 Balancing Accounts & Trial Balance 9. August sales consumed $6,000 of ingredients and boxes. 9. Dr. cost of goods sale 6,000 Cr. inventory 6,000 Inventory (5) 800 (8) 5,750 (9) 6,000 (9) 6,000 COGS 4-27

28 Balancing Accounts & Trial Balance 10. At the end of month, bills for various utilities used in August were received, totaling $ Dr. Utilities expense 450 Cr. Account payable 450 Accounts payable (5) 800 (8) 5,750 (10) 450 Utilities expense (10)

29 Balancing Accounts & Trial Balance 11. During the month, $4,800 of accounts payable was paid. 11. Dr. Account payable 4,800 Cr. cash 4,800 Cash (1) 5,000 (2) 750 (3) 4,000 (4) 7,200 (6) 12,000 (7) 3,000 (11) 4,800 Accounts payable (11) 4,800 (5) 800 (8) 5,750 (10)

30 Balancing Accounts & Trial Balance 12. On August 13, the firm catered a party for a fee of $200. Because the customer was a friend of company, the customer was told that payment could be made later in the month. 12. Dr. Accounts receivable 200 Cr. Sales revenue 200 Sales revenue Accounts receivable (12) 200 (6) 12,000 (12)

31 Balancing Accounts & Trial Balance 13. On August 29, a check was receive for the party of August Dr. Cash 200 Cr. Accounts receivable 200 Cash (1) 5,000 (2) 750 (3) 4,000 (4) 7,200 (6) 12,000 (7) 3,000 (13) 200 (11) 4,800 Accounts receivable (12) 200 (13)

32 Balancing Accounts & Trial Balance Balancing an account Balance -0- (1) 5,000 (3) 4,000 (6) 12,000 (13) ,200 Balance 5,450 Cash (2) 750 (4) 7,200 (7) 3,000 (11) 4,800 15,

33 Balancing Accounts & Trial Balance Balancing an account Accounts payable (11) 4, Balance (5) 800 (8) 5,750 (10) 450 7,000 2,200 Balance 4-33

34 Balancing Accounts & Trial Balance A trial balance: as of August

35 Trial Balance A trial balance is simply a list of the account names and the balances in each account as of a given moment of time, with debit balances shown in one column and credit balances in another column. The Purposes of a trial balance: Dr. = Cr. Preparing the FS 4-35

36 Adjusting Entries Modifies account balances at end of periodcontinuous transactions. Types: Recorded costs to be apportioned among 2 or more periods. Unrecorded expenses. Recorded revenues to be apportioned over 2 or more periods. Unrecorded revenues. 4-36

37 Adjusting Entries Depreciation expense: the systematic allocation of the cost of a long-lived asset to expense over the asset s useful life. Accumulated depreciation: instead of crediting depreciation to the account for the asset being depreciated, called a contra asset account. 4-37

38 Depreciation expense-example 4-38

39 Adjusting Entries - Exercise #1 We purchased equipment for $20,000. The equipment has a life of 5 years. What are the depreciation entries for years 1 and 2? (Assume straight line) How much is the accumulated depreciation (contra asset) at the end of year 2? What is a contra asset account? What is the book value at the end of year 2? What is the fair (or market or current) value of the equipment at the end of year 2? 4-39

40 Adjusting Entries Answer for Exercise #1 We purchased equipment for $20,000. The equipment has a life of 5 years. What are the depreciation entries for years 1 and 2? (Assume straight line) Depreciation expense 4,000 Year 1 Depreciation expense 4,000 Year

41 Adjusting Entries Answer for Exercise #1 We purchased equipment for $20,000. The equipment has a life of 5 years. How much is the accumulated depreciation (contra asset) at the end of year 2? Year 2 Accumulated Depreciation 8,

42 Adjusting Entries Answer for Exercise #1 We purchased equipment for $20,000. The equipment has a life of 5 years. What is a contra asset account? What is the book value at the end of year 2? Equipment, at cost $20,000 less: accumulated depreciation 8,000 net equipment 12,000 What is the fair (or market or current) value of the equipment at the end of year 2? 4-42

43 Adjusting Entries - Exercise #2 Prepare entries for the following: We purchase office supplies on 1/15 for $14,000. On hand at YE (12/31) are $3,000 of office supplies. 4-43

44 Adjusting Entries Allowance for Doubtful Account: another contra asset account-accounts receivable. Not all customers will pay their bills, thus, Accounts receivable account may overstated. Bad debt expense (detail in chapter 5) to adjust. 4-44

45 Bad debt expense-example 4-45

46 Adjusting Entries - Exercise #3 Prepare entries for the following: Credit sales for the year are $1,000,000. Dr. account receivable $1,000,000 Cr. Sales $1,000,000 At year end, we estimate we will collect all but approximately 1.5% of our sales from customers due to customers that go bankrupt or disappear. Account receivable gross $1,000,000 less: allowance for doubtful accounts $15,000 Net Account receivable $985,

47 Adjusting Entries 14. Adjusting entries for Rent expense 14. Dr. Rent expense 750 Cr. Prepaid expense 750 Prepaid Expense (2) 750 (14) 750 (14) 750 Rent expense 4-47

48 Adjusting Entries 15. Adjusting entries for Depreciation expense 15. Dr. depreciation expense 60 Cr. Accumulated depreciation 60 Depreciation Expense (15) 60 Accumulated Depreciation (15)

49 Adjusting Entries 16. Adjusting entries for accrued interest expense 16. Dr. interest expense 30 Cr. Interest payable 30 Interest Expense (16) 30 Interest payable (16)

50 Closing Entries Temporary or IS accounts are closed out to the clearing account Income Summary (= Profit & Loss Summary = Expense and Revenue Summary). Close out = zero out = transfer balance to another account Income summary account is closed out to RE. Only Permanent Accounts remain open. 4-50

51 Closing Entries A. closing the sales Revenues account. (A) 12,200 Sales revenue (6) 12,000 (12) 200 Balance: 12,200 Income Summary (A) 12,

52 Closing Entries B. closing the cost of sales account. Cost of Sales (9) 6,000 (B) 6,000 Income Summary (B) 6,000 (A) 12,

53 Closing Entries H. closing the cost of sales account. Income Summary (B) 6,000 (C) 3,000 (D) 450 (E) 750 (F) 60 (G) 30 10,290 (17) 382 (H) 1,528 (A) 12,200 12,200 Income Summary (17) 382 Retained Earnings Balance 0 To Balance 1,528 (H) 1,528 Balance 1,

54 Financial Statement-Income Statement Sales reveues 12,200 Cost of sales 6,000 Gross margin 6,200 Operating expense Wages expense 3,000 rent 750 Utilities expense 450 Depreciation 60 Interest 30 4,290 Income before income taxes 1,910 Income tax expense 382 Net income 1,

55 Financial Statement-Balance Sheet Assets Liabilities and Owner's Equity Cash 5,450 Accounts payable 2,200 Accounts receivable - Notes payable 4,000 Inventory 550 Accrued expenses 30 Prepaid expense - Income tax liability 382 Total current assets 6,000 Total liabilities 6,612 Equipment at cost 7,200 Paid-in capital 5,000 less: accumulated depreciation 60 Retained earnings 1,528 Equipment net 7,140 Total owner's equity 6,528 Total assets 13,140 Total L+E 13,

56 Financial Statement-Income Statement 4-56

57 Accounting System Consists of: Journals. Ledgers. Rules for using them. Manual, computerized, or anything between. In a computerized system: Bookkeeping steps are done electronically. Discussion problem 4-2, P

58 Objectives of Accounting System To process information efficiently (low cost). To obtain reports quickly. To ensure a high degree of accuracy. To minimize possibility of theft or fraud. 4-58

59 Summary of Chapter 4 Recording fundamentals The accounting process Transaction analysis The adjusting and closing process Accounting systems 4-59

60 Assignments of Chapter 4 Problem 4-2, P103 Problem 4-3, P103 Case 4-1, P105 Case 4-3, P

61 Thank you 4-61

62 Answer for Discussion problem 4-2 1) dr. Prepaid Rent $14,340 cr. Cash $14,340 Prepaid rent is an asset. 2) dr. Sales Discounts and Allowances $34,150 cr. Provision for Sales Discounts and Allowances $34,150 Sales discounts and allowances is a deduction from gross sales to arrive at net sales. The provision is a liability. 3) dr. Interest Receivable $35 cr. Interest Revenue $35 Interest receivable is an asset. Interest income would be listed as other income in this period s income statement. 4-62

63 Answer for Discussion problem 4-2 4) dr. Depreciation Expense $13,660 cr. Accumulated Depreciation $13,660 Depreciation expense is an income statement item. Accumulated depreciation is disclosed as a deduction from the related depreciable asset. 5) dr. Cash $2,730 cr. Deferred Revenue $2,730 Deferred revenue is a liability. 6) dr. Stamp Expense $100 Stamp Inventory $72 cr. Cash $172 Stamps expense is an income statement item. Stamp inventory is an asset. 7) Bad debt expense $1,350 Allowance for doubtful accounts $1,350 Bad debt expense account is an expense account. Allowance for doubtful accounts is a contra asset displayed as a deduction from the asset accounts receivable. 4-63

64 Example of Balance Sheet 4-64

Review of the Accounting Process THE BASIC MODEL

Review of the Accounting Process THE BASIC MODEL THE BASIC MODEL The accounting information system is designed to collect and organize data into information that is useful for stakeholders. The Accounting Equation The basic accounting equation is what

More information

Advanced Accounting. Chapter 4: Financial Reporting for a Departmentalized Business

Advanced Accounting. Chapter 4: Financial Reporting for a Departmentalized Business Advanced Accounting Chapter 4: Financial Reporting for a Departmentalized Business Financial statements are used to summarize financial info and then are used to evaluate the financial position and progress

More information

TRANSACTIONS ANALYSIS EXAMPLE. Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations:

TRANSACTIONS ANALYSIS EXAMPLE. Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations: TRANSACTIONS ANALYSIS EXAMPLE Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations: 1. Billings to clients for services provided: $350,000

More information

Accrual Accounting Process

Accrual Accounting Process Accrual Accounting Process 15.501 Accounting Spring 2004 Professor S. Roychowdhury Sloan School of Management Massachusetts Institute of Technology Feb 17/18, 2004 1 An accountant s functions include Classifying

More information

Authored for ENMU Tutoring Services. By Jessica Huff

Authored for ENMU Tutoring Services. By Jessica Huff By Jessica Huff The standard accounting equation is Assets=Liabilities + Stockholders Equity. Depending on which item someone is looking at will determine what the normal balance is. The normal balance

More information

Questions and Answers

Questions and Answers Questions and Answers 1. List and describe the major steps in the accounting cycle. 2. In accounting, debit and credit have specific meanings. What are they? 3. You overheard one of your friends telling

More information

TOPIC LEARNING OBJECTIVE

TOPIC LEARNING OBJECTIVE Topic Mapping 1 Transaction Analysis Understand the effect of various types of transactions on the accounting equation, accounting journal and accounting ledger. Concepts and Skills Accounting Equation

More information

CHAPTER 2 REVIEW OF THE ACCOUNTING PROCESS. Lecture Outline

CHAPTER 2 REVIEW OF THE ACCOUNTING PROCESS. Lecture Outline CHAPTER 2 REVIEW OF THE ACCOUNTING PROCESS Overview Chapter 1 explained that the primary means of conveying financial information to investors, creditors, and other external users is through financial

More information

Statements MAKEorBREAK Sample Questions

Statements MAKEorBREAK Sample Questions Castle 2.3 Statements Got the answer? Be the first to stand with your group s flag. Got it correct? MAKE or BREAK a castle, yours or any other group s. The group with the most castles wins. Enjoy! Question

More information

2-8. Identify whether each of the following items increases or decreases cash flow:

2-8. Identify whether each of the following items increases or decreases cash flow: Problems 2-8. Identify whether each of the following items increases or decreases cash flow: Increase in accounts receivable Increase in notes payable Depreciation expense Increase in investments Decrease

More information

CENTURY 21 ACCOUNTING, 8e General Journal Chapter Objectives

CENTURY 21 ACCOUNTING, 8e General Journal Chapter Objectives CENTURY 21 ACCOUNTING, 8e General Journal Chapter Objectives Chapter 1 Starting A Proprietorship: Changes that Affect the Accounting Equation After studying Chapter 1, you will be able to: 1. Define accounting

More information

Chapter 4 Adjustments, Financial Statements, and the Quality of Earnings

Chapter 4 Adjustments, Financial Statements, and the Quality of Earnings Chapter 4 Adjustments, Financial Statements, and the Quality of Earnings ANSWERS TO QUESTIONS 1. Adjusting entries are made at the end of the accounting period to record all revenues and expenses that

More information

Chapter 6 Statement of Cash Flows

Chapter 6 Statement of Cash Flows Chapter 6 Statement of Cash Flows The Statement of Cash Flows describes the cash inflows and outflows for the firm based upon three categories of activities. Operating Activities: Generally include transactions

More information

Accounting Skills Assessment Practice Exam Page 1 of 10

Accounting Skills Assessment Practice Exam Page 1 of 10 NAU ACCOUNTING SKILLS ASSESSMENT PRACTICE EXAM & KEY 1. A company received cash and issued common stock. What was the effect on the accounting equation? Assets Liabilities Stockholders Equity A. + NE +

More information

Financial Accounting. (Exam)

Financial Accounting. (Exam) Financial Accounting (Exam) Your AccountingCoach PRO membership includes lifetime access to all of our materials Take a quick tour by visiting wwwaccountingcoachcom/quicktour Table of Contents (click to

More information

Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information.

Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information. 0 Learning Objectives: 14.1 Describe the important of accounting and financial information. 14.2 Differentiate between managerial and financial accounting. 14.3 Identify the six steps of the accounting

More information

The Work Sheet and the Closing Process

The Work Sheet and the Closing Process C H A P T E R 4 The Work Sheet and the Closing Process A systematic approach is essential for efficient and accurate processing of large amounts of information. Whether work sheets are on paper or computerized,

More information

Review of Accounting Principles

Review of Accounting Principles Appendix A Review of Accounting Principles Appendix A is a review of basic accounting principles and procedures. Standard accounting procedures are based on the double-entry system. This means that each

More information

Objective Evidence. Unit of Measurement. Accounting Period Cycle. Business Entity. Going Concern. Adequate Disclosure. Matching Expenses with Revenue

Objective Evidence. Unit of Measurement. Accounting Period Cycle. Business Entity. Going Concern. Adequate Disclosure. Matching Expenses with Revenue Accounting Concept: A source document is prepared for each transaction Objective Evidence Accounting Concept: Business transactions are stated in numbers that have common values; that is, using a common

More information

Consolidated Balance Sheets

Consolidated Balance Sheets Consolidated Balance Sheets March 31 2015 2014 2015 Assets: Current assets Cash and cash equivalents 726,888 604,571 $ 6,057,400 Marketable securities 19,033 16,635 158,608 Notes and accounts receivable:

More information

EXERCISES. Does not normally require adjustment. Normally requires adjustment (AE).

EXERCISES. Does not normally require adjustment. Normally requires adjustment (AE). EXERCISES Ex. 3 1 1. Prepaid expense 2. Accrued revenue 3. Unearned revenue 4. Accrued expense 5. Unearned revenue 6. Prepaid expense 7. Accrued expense 8. Accrued expense Ex. 3 2 Account Accounts Receivable...

More information

Accounting Notes. Cash - includes money and any medium of exchange that a bank accepts at face value

Accounting Notes. Cash - includes money and any medium of exchange that a bank accepts at face value Asset Accounts: Cash - includes money and any medium of exchange that a bank accepts at face value Accounts Receivable - a record of an oral or implied promise of future cash receipts in exchange for goods

More information

COMPLETION OF THE ACCOUNTING CYCLE - Closing Entries -

COMPLETION OF THE ACCOUNTING CYCLE - Closing Entries - COMPLETION OF THE ACCOUNTING CYCLE - Closing Entries - Worksheet Overview Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Titles Debit Credit Debit Credit Debit

More information

Glossary of Accounting Terms Peter Baskerville

Glossary of Accounting Terms Peter Baskerville Glossary of Accounting Terms Peter Baskerville Account for or 'bring to account': An accounting phrase used to describe the recording of a financial transaction that is required under the generally accepted

More information

Learning Module 3 Journal Entries

Learning Module 3 Journal Entries Learning Module 3 Journal Entries The Accounting Equation Balance Sheet Income Statement = + + - Assets Liabilities Owners' Equity Revenue Expenses Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Recording journal

More information

THE ACCOUNTING INFORMATION SYSTEM

THE ACCOUNTING INFORMATION SYSTEM CHAPTER 3 THE ACCOUNTING INFORMATION SYSTEM OVERVIEW Accounting information must be accumulated and summarized before it can be communicated and analysed. In this chapter, we will discuss the steps involved

More information

Accounting 101 you don t have to be an accountant to run MYOB Your Daily Lives Cash vs. Accrual Accounting

Accounting 101 you don t have to be an accountant to run MYOB Your Daily Lives Cash vs. Accrual Accounting MYOB US, Inc. April 2002 Accounting 101 Like all small business owners, you went into business with a dream: to sell your unique product or services and make a living for you, your family, and your employees.

More information

The Double-Entry System EFFECTS OF TRANSACTIONS ON THE BALANCE SHEET. Initial Paid-in Capital. An Example Entity. Transaction 2.

The Double-Entry System EFFECTS OF TRANSACTIONS ON THE BALANCE SHEET. Initial Paid-in Capital. An Example Entity. Transaction 2. The Double-Entry System EFFECTS OF TRANSACTIONS ON THE BALANCE SHEET 2001 Richard S. Barr Transaction: Any event that affects the entity's financial position and requires recording Every accounting transaction

More information

CORPORATE ACCOUNTING EXERCISES (these exercises can be used as tests if teachers wish to assess elements of this topic separately)

CORPORATE ACCOUNTING EXERCISES (these exercises can be used as tests if teachers wish to assess elements of this topic separately) CORPORATE ACCOUNTING EXERCISES (these exercises can be used as tests if teachers wish to assess elements of this topic separately) 1 The Trial Balance of Samcat Holdings Ltd at the end of the last financial

More information

CHAPTER 4 The Mechanics of Financial Accounting

CHAPTER 4 The Mechanics of Financial Accounting CHAPTER 4 The Mechanics of Financial Accounting SYNOPSIS This chapter covers the mechanics underlying preparation of financial statements and how they help to ensure that a company s transactions are accurately

More information

CENTURY 21 ACCOUNTING, 8e General Journal Key Terms and Definitions

CENTURY 21 ACCOUNTING, 8e General Journal Key Terms and Definitions CENTURY 21 ACCOUNTING, 8e General Journal Key Terms and Definitions Chapter 1 Starting A Proprietorship: Changes that Affect the Accounting Equation account: a record summarizing all the information pertaining

More information

Financial Reporting and Analysis Chapter 2 Solutions Accrual Accounting and Income Determination Exercises

Financial Reporting and Analysis Chapter 2 Solutions Accrual Accounting and Income Determination Exercises Financial Reporting and Analysis Chapter 2 Solutions Accrual Accounting and Income Determination Exercises Exercises E2-1. Determining accrual and cash basis revenue (AICPA adapted) Since the subscription

More information

CHAPTER 10 Financial Statements NOTE

CHAPTER 10 Financial Statements NOTE NOTE In practice, accruals accounts and prepayments accounts are implied rather than drawn up. It is common for expense accounts to show simply a balance c/d and a balance b/d. The accrual or prepayment

More information

Chapter 5. Accounting for merchandising operations. Appendix 5A: Periodic inventory system

Chapter 5. Accounting for merchandising operations. Appendix 5A: Periodic inventory system 1 Chapter 5 Accounting for merchandising operations Appendix 5A: Periodic inventory system 2 Learning objectives 1. Record purchase and sales transactions under the periodic inventory system 2. Prepare

More information

Chapter 4. Completing the accounting cycle

Chapter 4. Completing the accounting cycle 1 Chapter 4 Completing the accounting cycle 2 Learning objectives 1. Prepare an accounting worksheet and describe its purpose 2. Prepare a classified balance sheet and explain the major headings 3. Explain

More information

T-Account Approach to Preparing a Statement of Cash Flows Indirect Method

T-Account Approach to Preparing a Statement of Cash Flows Indirect Method 266 Part 1 E M Foundations of Financial Accounting With these adjustments to the income statement, we can now present the operating activities section of the statement of cash flows using either the direct

More information

Cash Flow Analysis. 15.511 Corporate Accounting Summer 2004. Professor SP Kothari. Sloan School of Management Massachusetts Institute of Technology

Cash Flow Analysis. 15.511 Corporate Accounting Summer 2004. Professor SP Kothari. Sloan School of Management Massachusetts Institute of Technology Cash Flow Analysis 15.511 Corporate Accounting Summer 2004 Professor SP Kothari Sloan School of Management Massachusetts Institute of Technology June 16, 2004 1 Statement of Cash Flows Reports operating

More information

E2-2: Identifying Financing, Investing and Operating Transactions?

E2-2: Identifying Financing, Investing and Operating Transactions? E2-2: Identifying Financing, Investing and Operating Transactions? Listed below are eight transactions. In each case, identify whether the transaction is an example of financing, investing or operating

More information

Accumulated Depreciation Equipment

Accumulated Depreciation Equipment Chapter 4 Completing the Accounting Cycle > DO IT! Worksheet Balance sheet: Extend assets to debit column. Extend liabilities to credit column. Extend contra assets to credit column. Extend drawings account

More information

Analyzing the Statement of Cash Flows

Analyzing the Statement of Cash Flows Analyzing the Statement of Cash Flows Operating Activities NACM Upstate New York Credit Conference 2015 By Ron Sereika, CCE,CEW NACM 1 Objectives of this Educational Session u Show how the statement of

More information

Unit 2 The Basic Accounting Cycle

Unit 2 The Basic Accounting Cycle Unit 2 The Basic Accounting Cycle Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Business Transactions and the Accounting Equation Transactions That Affect Assets, Liabilities, and

More information

Assessment Schedule 2013 Accounting: Prepare financial information for an entity that operates accounting subsystems (91176)

Assessment Schedule 2013 Accounting: Prepare financial information for an entity that operates accounting subsystems (91176) NCEA Level 2 Accounting (91176) 2013 Page 1 of 7 Assessment Schedule 2013 Accounting: Prepare financial information for an entity that operates accounting subsystems (91176) Evidence Part A Question One

More information

Chapter 13 Financial Statements and Closing Procedures

Chapter 13 Financial Statements and Closing Procedures Chapter 13 - Financial Statements and Closing Procedures Chapter 13 Financial Statements and Closing Procedures TEACHING OBJECTIVES 13-1) Prepare a classified income statement from the worksheet. 13-2)

More information

(a) Prepaid Insurance to recognize insurance expired during the period.

(a) Prepaid Insurance to recognize insurance expired during the period. BRIEF EXERCISE 4-1 (a) (b) (c) (d) (e) (f) Cash $ 100 0 0 +800 2,500 0 Net Income $0 20 +1,300 0 0 600 BRIEF EXERCISE 4-2 (a) Prepaid Insurance to recognize insurance expired during the period. (b) Depreciation

More information

1. If the assets owned by a business total $100,000 and liabilities total $70,000, stockholders' equity totals $30,000.

1. If the assets owned by a business total $100,000 and liabilities total $70,000, stockholders' equity totals $30,000. Rallis Page 1 Name: _ Date: 1. If the assets owned by a business total $100,000 and liabilities total $70,000, stockholders' equity totals $30,000. A) True B) False 2. If total liabilities decreased by

More information

A = L + OE. Transaction 1 Assets = Liabilitites + Owners equity + 1,000,000 Cash + 1,000,000 Common stock

A = L + OE. Transaction 1 Assets = Liabilitites + Owners equity + 1,000,000 Cash + 1,000,000 Common stock FINANCIAL STATEMENT ANALYSIS Henry Jarva Aalto University, Spring 2015 Student name: EXERCISE 1. Provide journal entries for Transactions 5 8, Adjusting Entries 2 7, and prepare Exhibit 1. 2. Calculate

More information

Chapter 5 Accounting for Merchandising Operations

Chapter 5 Accounting for Merchandising Operations Chapter 5 Accounting for Merchandising Operations Purchase Transactions Purchaser records goods at cost. When goods are returned, purchaser reduces Inventory. On September 5, De La Hoya Company buys merchandise

More information

LEARN DEBITS AND CREDITS. Written by John Gillingham, CPA

LEARN DEBITS AND CREDITS. Written by John Gillingham, CPA Written by John Gillingham, CPA Copyright 2015 by John Gillingham All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written

More information

Century 21 Accounting, 8e General Journal Chapter Outlines

Century 21 Accounting, 8e General Journal Chapter Outlines Century 21 Accounting, 8e General Journal Chapter Outlines PART 1 Chapter 1 ACCOUNTING FOR A SERVICE BUSINESS ORGANIZED AS A PROPRIETORSHIP Starting A Proprietorship: Changes that Affect the Accounting

More information

Statement of Cash Flows

Statement of Cash Flows PREPARING THE STATEMENT OF CASH FLOWS: THE INDIRECT METHOD OF REPORTING CASH FLOWS FROM OPERATING ACTIVITIES The work sheet method described in the text book is not the recommended approach. We will provide

More information

ACCT1115. Review Package - Midterm SOLUTION Fall 2013

ACCT1115. Review Package - Midterm SOLUTION Fall 2013 ACCT1115 Review Package - Midterm SOLUTION Fall 2013 Part I Multiple Choice 1) How should you record the purchase of an expensive automobile? a) Decrease cash, increase assets b) Decrease cash, increase

More information

COMPONENTS OF THE STATEMENT OF CASH FLOWS

COMPONENTS OF THE STATEMENT OF CASH FLOWS ILLUSTRATION 24-1 OPERATING, INVESTING, AND FINANCING ACTIVITIES COMPONENTS OF THE STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES + Sales and Service Revenue Received Cost of Sales Paid Selling

More information

Closing Entries and the Postclosing Trial Balance

Closing Entries and the Postclosing Trial Balance 6-1 McGraw-Hill 2009 The McGraw-Hill Companies, Inc. All rights reserved. Chapter Closing Entries and the Postclosing Trial Balance 6 Section 1: Closing Entries Section Objectives 1. Journalize and post

More information

Assessment Schedule 2010 Accounting: Prepare financial statements and related accounting entries for sole proprietors (90224)

Assessment Schedule 2010 Accounting: Prepare financial statements and related accounting entries for sole proprietors (90224) NCEA Level 2 Accounting (90224) 2010 page 1 of 7 Assessment Schedule 2010 Accounting: Prepare financial statements and related accounting entries for sole proprietors (90224) Evidence Statement ONE Part

More information

Study Guide - Final Exam Accounting I

Study Guide - Final Exam Accounting I Study Guide - Final Exam Accounting I True/False Indicate whether the sentence or statement is true or false. 1. Entries in a sales journal affect account balances in both the accounts receivable ledger

More information

Bookkeeping Tips & T Accounts Prepared by Accomp Services (www.accompservices.ca)

Bookkeeping Tips & T Accounts Prepared by Accomp Services (www.accompservices.ca) Bookkeeping Tips & T Accounts Prepared by Accomp Services (www.accompservices.ca) Further valuable accounting and bookkeeping website resources are listed at the end of this document. A business is one

More information

ACCOUNTING 105 CONCEPTS REVIEW

ACCOUNTING 105 CONCEPTS REVIEW ACCOUNTING 105 CONCEPTS REVIEW A note from the tutors: This handout is designed to help you review important information as you study for your cumulative final exam. While it does cover many important

More information

PART 5. External Reporting and Performance Evaluation. Statements of financial performance and position. Statement of cash flows 19

PART 5. External Reporting and Performance Evaluation. Statements of financial performance and position. Statement of cash flows 19 PART 5 External Reporting and Performance Evaluation Statements of financial performance and position 18 Statement of cash flows 19 Analysis and interpretation of financial statements 20 CHAPTER 18 Statements

More information

Baseline Assessment. Date Accounting 1

Baseline Assessment. Date Accounting 1 Name Baseline Assessment Date Accounting 1 Part 1: Instructions: Place a check mark under the column for each account to determine which Financial the accounts belongs on. Financial Information 1. Cash

More information

CHAPTER 2 ACCOUNTING STATEMENTS, TAXES, AND CASH FLOW

CHAPTER 2 ACCOUNTING STATEMENTS, TAXES, AND CASH FLOW CHAPTER 2 ACCOUNTING STATEMENTS, TAXES, AND CASH FLOW Answers to Concepts Review and Critical Thinking Questions 1. True. Every asset can be converted to cash at some price. However, when we are referring

More information

Cash Flow Analysis. 15.501/516 Accounting Spring 2004. Professor S. Roychowdhury. Sloan School of Management Massachusetts Institute of Technology

Cash Flow Analysis. 15.501/516 Accounting Spring 2004. Professor S. Roychowdhury. Sloan School of Management Massachusetts Institute of Technology Cash Flow Analysis 15.501/516 Accounting Spring 2004 Professor S. Roychowdhury Sloan School of Management Massachusetts Institute of Technology Mar 1/3, 2004 1 About The Exam March 10 th a week from today.

More information

MARK SCHEME for the October/November 2011 question paper for the guidance of teachers 0452 ACCOUNTING. 0452/23 Paper 2, maximum raw mark 120

MARK SCHEME for the October/November 2011 question paper for the guidance of teachers 0452 ACCOUNTING. 0452/23 Paper 2, maximum raw mark 120 www.xtremepapers.com UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS International General Certificate of Secondary Education MARK SCHEME for the October/November question paper for the guidance of

More information

國 立 體 育 學 院 九 十 六 學 年 度 學 士 班 轉 學 考 試 試 題

國 立 體 育 學 院 九 十 六 學 年 度 學 士 班 轉 學 考 試 試 題 國 立 體 育 學 院 九 十 六 學 年 度 學 士 班 轉 學 考 試 試 題 會 計 學 ( 本 試 題 共 8 頁 ) 注 意 :1 答 案 一 律 寫 在 答 案 卷 上, 否 則 不 予 計 分 2 請 核 對 試 卷 准 考 證 號 碼 與 座 位 號 碼 三 者 是 否 相 符 3 試 卷 彌 封 處 不 得 汚 損 破 壞 4 行 動 電 話 或 呼 叫 器 等 通 訊 器 材 不

More information

Basic Accounting Principles

Basic Accounting Principles Basic Accounting Principles Basic Accounting Model The basic accounting model represents the relationship between assets (what the company owns), liabilities (what the company owes), and owner s equity

More information

CHAPTER 2 ACCOUNTING FOR TRANSACTIONS

CHAPTER 2 ACCOUNTING FOR TRANSACTIONS CHAPTER 2 ACCOUNTING FOR TRANSACTIONS Key Terms and Concepts to Know Double entry accounting: Debits and Credits Total debits must always equal total credits Accounting Books: Accounts General Journal

More information

Income Measurement and Profitability Analysis

Income Measurement and Profitability Analysis PROFITABILITY ANALYSIS The following financial statements for Spencer Company will be used to demonstrate the calculation of the various ratios in profitability analysis. Spencer Company Comparative Balance

More information

Fuqua School of Business, Duke University ACCOUNTG 510: Foundations of Financial Accounting

Fuqua School of Business, Duke University ACCOUNTG 510: Foundations of Financial Accounting Fuqua School of Business, Duke University ACCOUNTG 510: Foundations of Financial Accounting Lecture Note: Financial Statement Basics, Transaction Recording, and Terminology I. The Financial Reporting Package

More information

Chapter 4. Completing the accounting cycle. Appendix 4A: Reversing entries

Chapter 4. Completing the accounting cycle. Appendix 4A: Reversing entries 1 Chapter 4 Completing the accounting cycle Appendix 4A: Reversing entries 2 Learning objective 1. Prepare reversing entries and describe their purpose 3 Reversing entries Reversing entries are optional

More information

Gold Run Snowmobile. Adjusting Entries and Closing Entries For The Quarter Ended December 31. Final Project Evaluation. 5 th Edition.

Gold Run Snowmobile. Adjusting Entries and Closing Entries For The Quarter Ended December 31. Final Project Evaluation. 5 th Edition. Gold Run Snowmobile 5 th Edition Adjusting Entries and Closing Entries For The Quarter Ended December 31 and the Final Project Evaluation Page 1 ADJUSTING ENTRIES FOR THE QUARTER Using a copy of the December

More information

Preparing Financial Statements

Preparing Financial Statements Carroll_CH03_023-040.qxd 8/10/06 4:37 PM Page 23 CHAPTER 3 Preparing Financial Statements OBJECTIVES F After reading this chapter, the student should be able to: 1. Describe the general process by which

More information

Consolidated Interim Earnings Report

Consolidated Interim Earnings Report Consolidated Interim Earnings Report For the Six Months Ended 30th September, 2003 23th Octorber, 2003 Hitachi Capital Corporation These financial statements were prepared for the interim earnings release

More information

b. To summarize the operating, investing, and financing activities of the business.

b. To summarize the operating, investing, and financing activities of the business. Chapter 24 Statement of Cash Flows LECTURE OUTLINE The material in this chapter can be covered in three class sessions. Students often have difficulty in adjusting transactions recorded on an accrual basis

More information

Financial Reporting & Analysis Chapter 17 Solutions Statement of Cash Flows Exercises

Financial Reporting & Analysis Chapter 17 Solutions Statement of Cash Flows Exercises Financial Reporting & Analysis Chapter 17 Solutions Statement of Cash Flows Exercises Exercises E17-1. Determining cash flows from operations Using the indirect method, cash flow from operations is computed

More information

Supplement to CHAPTER 3 CLOSING ENTRIES AND THE WORK SHEET

Supplement to CHAPTER 3 CLOSING ENTRIES AND THE WORK SHEET Supplement to CHAPTER 3 CLOSING ENTRIES AND THE WORK SHEET Answers to Review Questions 1. No, the work sheet cannot be used as a substitute for the financial statements. It is a tool used in preparing

More information

Closing the Books Section 7 Accounting 11

Closing the Books Section 7 Accounting 11 Closing the Books At the end of a fiscal year once all the transactions for the entity have been recorded, the revenue and expense accounts must be closed out to a zero balance. These accounts have been

More information

CHAPTER 4 COMPLETING THE ACCOUNTING CYCLE SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM S TAXONOMY. True-False Statements

CHAPTER 4 COMPLETING THE ACCOUNTING CYCLE SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM S TAXONOMY. True-False Statements CHAPTER 4 COMPLETING THE ACCOUNTING CYCLE SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM S TAXONOMY Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT True-False Statements 1. 1 K 9. 2 K 17. 4

More information

Statement of Cash Flows

Statement of Cash Flows THE CONTENT AND VALUE OF THE STATEMENT OF CASH FLOWS The cash flow statement reconciles beginning and ending cash by presenting the cash receipts and cash disbursements of an enterprise for an accounting

More information

Accounting, CPT Chapter 6 CA PRATHAP SS

Accounting, CPT Chapter 6 CA PRATHAP SS Accounting, CPT Chapter 6 CA PRATHAP SS INTRODUCTION Preparation of Final Accounts is the last phase of the Accounting Process. INTRODUCTION The process of accounting starts from Transaction then entered

More information

Accrual Accounting Process: Part II

Accrual Accounting Process: Part II Accrual Accounting Process: Part II 15.511 Corporate Accounting Summer 2003 Professor S.P. Kothari Sloan School of Management Massachusetts Institute of Technology June 14, 2003 1 Agenda for Today Continue

More information

Accounting Cycle. Matching Principle

Accounting Cycle. Matching Principle CHAPTER 3 Accounting Cycle Analyze and record the transactions Post the transactions and prepare trial balance Adjust the accounts and prepare trial balance Prepare the financial statements Close the accounts

More information

SETTING UP YOUR BUSINESS ACCOUNTING SYSTEM

SETTING UP YOUR BUSINESS ACCOUNTING SYSTEM 100 Arbor Drive, Suite 108 Christiansburg, VA 24073 Voice: 540-381-9333 FAX: 540-381-8319 www.becpas.com Providing Professional Business Advisory & Consulting Services Douglas L. Johnston, II djohnston@becpas.com

More information

Financial Statements for Manufacturing Businesses

Financial Statements for Manufacturing Businesses Management Accounting 31 Financial Statements for Manufacturing Businesses Importance of Financial Statements Accounting plays a critical role in decision-making. Accounting provides the financial framework

More information

B Exercises 4-1. (d) Intangible assets. (i) Paid-in capital in excess of par.

B Exercises 4-1. (d) Intangible assets. (i) Paid-in capital in excess of par. B Exercises E4-1B (Balance Sheet Classifications) Presented below are a number of balance sheet accounts of Castillo Inc. (a) Trading Securities. (h) Warehouse in Process of Construction. (b) Work in Process.

More information

William B. Pollard, Appalachian State University, Boone, NC 28608, pollardwb@appstate.edu INTRODUCTION

William B. Pollard, Appalachian State University, Boone, NC 28608, pollardwb@appstate.edu INTRODUCTION TEACHING PRINCIPLES OF ACCOUNTING: HELPING STUDENTS IDENTIFY TEN DIFFERENCES WHEN COMPARING A TRIAL BALANCE, AN ADJUSTED TRIAL BALANCE AND A BALANCE SHEET William B. Pollard, Appalachian State University,

More information

! "#$ %&!& "& ' - 3+4 &*!&-.,,5///2!(.//+ & $!- )!* & % +, -).//0)& 7+00///2 *&&.4 &*!&- 7.00///2 )!*.//+ 8 -!% %& "#$ ) &!&.

! #$ %&!& & ' - 3+4 &*!&-.,,5///2!(.//+ & $!- )!* & % +, -).//0)& 7+00///2 *&&.4 &*!&- 7.00///2 )!*.//+ 8 -!% %& #$ ) &!&. ! "#!""#$%$#$#$"& $'"()*+,$-).,/ 012! "#$ %&!& "& '!(&)!*&%+,-).//0 -#$#3-4' &,'1$1# $!-!(.//0)& +01+///2 *&& - 3+4 &*!&-.,,5///2!(.//+ &!(!-6%(!(.//.$(!(.//0)& 01,///2 //+2% &*!&- 5,0///2 //32%!(.//+

More information

Glossary of Accounting Terms

Glossary of Accounting Terms Glossary of Accounting Terms Account - Something to which transactions are assigned. Accounts in MYOB are in one of eight categories: Asset Liability Equity Income Cost of sales Expense Other income Other

More information

CASH FLOW STATEMENT. On the statement, cash flows are segregated based on source:

CASH FLOW STATEMENT. On the statement, cash flows are segregated based on source: CASH FLOW STATEMENT On the statement, cash flows are segregated based on source: Operating activities: involve the cash effects of transactions that enter into the determination of net income. Investing

More information

ACCOUNTING 1 (ACN101- M)

ACCOUNTING 1 (ACN101- M) 1 ACCOUNTING 1 (ACN101- M) STUDY UNIT 1: THE NATURE AND FUNCTION OF ACCOUNTING DEFINITION: Accounting can be defined as the orderly & systematic recording of the monetary values of financial transactions

More information

A Simple Model. The Accounting Equation

A Simple Model. The Accounting Equation An introduction to the accounting equation in the context of building a financial model. This series introduces the financial statements in the context of a financial model. NOTES TO ACCOMPANY VIDEOS These

More information

1. $45000 2. $108000 3. $63000 4. $135000

1. $45000 2. $108000 3. $63000 4. $135000 For the last several years Monte Cristo Corp. has operated with a gross profit rate of 30%. On January 1 of the current year, the company had on hand inventory with a cost of $150,000. Purchases of merchandise

More information

Total shares at the end of ten years is 100*(1+5%) 10 =162.9.

Total shares at the end of ten years is 100*(1+5%) 10 =162.9. FCS5510 Sample Homework Problems Unit04 CHAPTER 8 STOCK PROBLEMS 1. An investor buys 100 shares if a $40 stock that pays a annual cash dividend of $2 a share (a 5% dividend yield) and signs up for the

More information

GBA 521 Midterm Review Dr. Markelevich

GBA 521 Midterm Review Dr. Markelevich GBA 521 Midterm Review Dr. Markelevich Multiple Choice (3 points for each question) Identify the letter of the choice that best completes the statement or answers the question. Wynn Corp. Wynn Corp. reported

More information

Time Period Assumption

Time Period Assumption ILLUSTRATION 3-1 GUIDELINES TO REPORT REVENUE AND EXPENSES Time Period Assumption Economic life of business can be divided into artificial time periods Revenue Recognition Principle Revenue recognized

More information

CENTRE FOR CONTINUING EDUCATION BBA (AVIATION OPERATION)

CENTRE FOR CONTINUING EDUCATION BBA (AVIATION OPERATION) CENTRE FOR CONTINUING EDUCATION BBA (AVIATION OPERATION) BATCH: SEMESTER: NAME: ROLL NO: ASSIGNMENT 1 & 2 FOR BUSINESS ACCOUNTING BBCF 131 UNIVERSITY OF PETROLEUM & ENERGY STUDIES Assignment-1 Note: All

More information

In the event of a tie, the score on the last ten questions will be used as a tie-breaker.

In the event of a tie, the score on the last ten questions will be used as a tie-breaker. NEW YORK STATE ASSOCIATION FUTURE BUSINESS LEADERS OF AMERICA SPRING DISTRICT MEETING ACCOUNTING II 2010 TEST DIRECTIONS 1. Complete the information requested on the answer sheet. PRINT your name on the

More information

Assignment 6: Adjusting Journal Entries and

Assignment 6: Adjusting Journal Entries and Name: Due Date: December 12, 2011 Score: out of a possible 47 Course value: 7.5% Assignment 6: Adjusting Journal Entries and Worksheets A series of transactions are presented and their journal entries

More information

Chapter 9, Problem 7 Closing inventory profits Before Tax After tax 40% tax

Chapter 9, Problem 7 Closing inventory profits Before Tax After tax 40% tax Chapter 9, Problem 7 Cost of 70% of Simon 900,000 Book value of Simon Common stock 550,000 Retained earnings Jan. 1 400,000 Net income to April 1 (¼ 200,000) 50,000 1,000,000 70% 700,000 Purchase discrepancy

More information

MARK SCHEME for the October/November 2010 question paper for the guidance of teachers 0452 ACCOUNTING. 0452/22 Paper 2, maximum raw mark 120

MARK SCHEME for the October/November 2010 question paper for the guidance of teachers 0452 ACCOUNTING. 0452/22 Paper 2, maximum raw mark 120 www.xtremepapers.com UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS International General Certificate of Secondary Education MARK SCHEME for the October/November 2010 question paper for the guidance

More information