ACC 305 Lecture Notes - Lecture 15: Perpetual Inventory, Financial Statement, Retained Earnings

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10 Mar 2019

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Accounts store recorded monetary information from transactions, events, and arrangements. Chart of accounts comprehensive list of all accounts and their assigned account numbers. T-accounts format used to represent ledger accounts. Debit left side of a t-account. Credit right side of a t-account. Double-entry system for each transaction, event, or arrangement, the total dollar amount of debits must always equal the total dollar amount of credits. Permanent accounts the asset, liability, and shareholders" equity accounts whose balances at the end of the period are carried forward to the next period. Temporary accounts (periodic accounts) used to determine the changes in retained earnings that occur during a period. Contra account shows a reduction in a related account. Step 1 record the transactions, events, and arrangements in a journal. Step 2 post all journal entries to the accounts in the ledger. Step 3 prepare and post adjusting entries.

Related Questions

problem 4-26A Comprehensive cycle problem: Perpetual system LO4-2,

At the beginning of 2016, the Redd Company had the followingbalances in Its accounts:

cash 6.900

Inventory 15,000

Land 7,000

Common Stock 15,000

Retaind Earnings 13,900
l . purchased inventory that cost $5,200 on account from RossCompany under terms 1/10. 11/30. The merchandise was delivered FOBshipping point. Freight costs of S]90 '*ere paid incash.During 2016, the company experienced the followingevents:

2. Returned $400 of the inventory that it had purchased becausethe inventory was damaged In transit. The seller agreed to pay thereturn freight cost.

3. Paid the amount due on its account payable to Ross Companywithin the cash discount period.

4. Sold inventory that had cost $6,800 for $12, 100 on account,under terms 2/10, n/45.

5. Received merchandise returned from a customer. Themerchandise originally cost $900 and was sold to the customer for$1 ,680 cash, The customer was paid Sl ,680 cash for the returnedmerchandise.

6. Delivered goods FOB destination in Event 4. Freight costs of$140 were paid in cash.

7. Collected the amount due on the account receivable within thediscount period.

8. Sold the land for $8,500.

9. Recognized accrued interest income of $600.

10. Took a physical count indicating that $13,400 of inventorywas on hand at the end of the accounting period.

used, When an event has more than one part, use letters todistinguish the etyeets of each part. The first event is recordedas an example

b. Record the events in general journal format.

c. Open ledger T-accounts, and post the beginning balances andthe events to the accounts.

Prepare a multistep income statement, a statement of changes instockholders' equity, a bal. ance sheet, and a statement of cashflows.

e. Record and post the closing entries, and prepare apost-closing trial balance.

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ACC 305 Lecture Notes - Lecture 15: Perpetual Inventory, Financial Statement, Retained Earnings

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