Study Guides (248,237)
Canada (121,422)
Philosophy (261)
PHL100Y1 (78)
all (9)

Accounting1_teaching-notes_ch5-7.pdf

29 Pages
111 Views
Unlock Document

Department
Philosophy
Course
PHL100Y1
Professor
All Professors
Semester
Spring

Description
Chapter 5Lesson Notes H1 Chapter 5The Expanded Ledger Revenue Expenses and Drawings In Chapter 4 students gained experience handling equity transactions but they recorded each change in one account only the Capital account This is technically sound but if it were the usual practice a great deal of necessary information would become hidden in this one account To reveal this information new equity accounts are introduced in Chapter 5 H2 51 The Expanded Ledger and Income Statement This section introduces the expanded ledger adds depth to students understanding of the income statement and introduces the chart of accounts Textbook p 1321As shown in the textbook the mnemonic RED can be used to help remember the three new types of accountsRevenue Expense Drawings Hint The Drawings account is easy to remember because it is the account that tracks money the owner is withdrawing from the business2 After reviewing the opening paragraphs ask students to examine Figure 51 on page 132 DRAFTThe capital account and trial balance are shown Point out that they are no different from the ones students worked with in Chapter 43 Ask students to focus on page 132 while making sure not to look at page 134 Then ask them the questions that appear at the top of page 133 Students should clearly understand that even though the amounts in the capital account are correct they fail to deliver the information a business owner needs p 135 4 Direct the students attention to Figure 53 Make a transparency of Master 51 to help you emphasize the key features of Figure 53 The expanded equity section contains all the amounts that were in the capital account in Figure 51 but they are organized into different accounts The data is the same they have just been reclassified To verify this show students that the value of the capital account from the Chapter 4 trial balance is the same as total owners equity from Chapter 526 137Copyright2013 Pearson Canada IncDRAFT MANUSCRIPT 1Chapter 5Lesson Notes Textbook p 136 5 The expanded ledger can now be used to answer the questions at the top of page 133 Show students the income statement in Figure 54 Ask them what amount is most crucial on this statement Answer the net income which is the bottom line Ask them to point out which equity accounts from the expanded ledger are missing from the income statement Answer Capital and Drawings Ask them if they are now better able to answer the questions on page 1336 Make a transparency of Master 52 prepared from Figure 54 to illustrate a properly formatted income statement This illustration clearly shows that only revenue and expenses are shown in the income statementthe other equity accounts Capital and Drawings do not appear Hint To illustrate the uses of the income statement tell students to write a paragraph about the consequences owners managers bankers and tax authorities would face if the income statements for a business were not prepared for three years Hint Give students practice creating an income statement by getting them to make one for a celebrity or other famous figure Challenge them to come up with a creative person or business and use realistic sales figures and expense accounts Ensure they use proper formatting Allow the class to share their income statements with each DRAFTother You can also refer to the Personalize It exercise at the end of the chapter for a more indepth personalized exercise p 137 7 Tell students to record the definition of revenue and expenses in their notebooksHint Stress the fact that different account titles can be used for revenue depending on the nature of the business so that students do not get locked into using just one title The Sales Revenue account of a merchandising business will be introduced in Chapter 108 The calculation for net income or net loss is straightforward Refer students back to the income statement on page 136 to see how net income is presented TextbookCopyright2013 Pearson Canada IncDRAFT MANUSCRIPT 2
More Less

Related notes for PHL100Y1

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit