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Class #4! ! ACTG 1P91! October. 4th, 2011
Accounting Process (Not required for tests)
1. Transaction / Source Document
2. Analyze Transaction
4. Post to Ledger
5. Trial Balance
6. Gather Data for Adjustments
8. Financial Statements
AT INTERIM - STOP HERE
9. Journalize and Post Adjustments
10. Journalize and Post Closing
11. Post-Closing Trial Balance
12. Journalize and Post Reversing Entries
Employees payday is on Friday. However if moment transfers over ﬁscal period
(January - December (Friday)).
$20 - Monday
$20 - Tuesday
Dec 31!Salaries Expense!40
4 Types of Adjustments
-All will overlap time periods
-We need to looks for
1. Apportion recorded costs to period beneﬁted asset account/expense account
a. Ex. Rent Expense paid in advance for 3 months ($3000) in December, 2 months
would be for next ﬁscal year. Rent Expense gets $2000 credited and debited into
b. Ex. Rent Expense paid in advance for 3 months ($3000) in December. Prepaid
Rent gets debited $3000. Then to adjust, $1000 is credited from Ppd Rent and
Debited into Rent Expense.
c. Ex. Amortization on a building ($2M), Building credited $100,000, Amort. Exp
2. Apportion recorded revenue to period earned liability account/revenue account
a. Ex. Unearned Revenue, from Prepaid Rent, Cash Debited $3000, Unearned
Revenue credited $3000. At the end of the month, $1000 is earned revenue, so
Unearned Revenue debited $1000, Rent Revenue credited $1000.