WRD 27e - IE PPT - Ch03 - ADA
WRD 27e - IE PPT - Ch03 - ADA
WRD 27e - IE PPT - Ch03 - ADA
3
The Adjusting Process
Accounting
27e
Warren
human/iStock/360/Getty Images
Reeve
Duchac
Learning Objectives
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Revenue and Expense Recognition
(slide 1 of 2)
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Revenue and Expense Recognition
(slide 2 of 2)
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The Adjusting Process
(slide 1 of 3)
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The Adjusting Process
(slide 2 of 3)
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The Adjusting Process
(slide 3 of 3)
a. Cash
b. Utilities Expense
c. Wages Expense
d. Land
e. Accounts Receivable
f. Unearned Rent
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Types of Accounts Requiring Adjustment
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Types of Accounts Requiring Adjustment:
Accruals
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Accruals
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Types of Accounts Requiring Adjustment:
Deferrals
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Example Exercise Type of Adjustment
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Unadjusted Trial Balance for NetSolutions
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Expanded Chart of Accounts for NetSolutions
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Accrued Revenues
increase increase
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Effects of Omitting the Adjusting
Entry for Accrued Revenues
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Example Exercise Adjustment for Accrued Revenues
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Accrued Expenses
(slide 1 of 2)
increase increase
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Accrued Expenses
(slide 2 of 2)
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Accrued Wages
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Effects of Omitting the Adjusting
Entry for Accrued Expenses
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Example Exercise Adjustment for Accrued Expense
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Unearned Revenues
decrease increase
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Effects of Omitting the Adjusting
Entry for Unearned Revenues
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Example Exercise Adjustment for Unearned Revenue
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Prepaid Expenses: Supplies
(slide 1 of 2)
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Prepaid Expenses: Supplies
(slide 2 of 2)
decrease increase
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Prepaid Expenses: Prepaid Insurance
decrease increase
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Effects of Omitting the Adjusting
Entries for Prepaid Expenses
• If the preceding adjustments for supplies ($1,240)
and insurance ($200) are not recorded, the
financial statements prepared as of December 31
will be misstated.
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Depreciation Expense
(slide 1 of 8)
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Depreciation Expense
(slide 2 of 8)
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Depreciation Expense
(slide 3 of 8)
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Depreciation Expense
(slide 4 of 8)
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Depreciation Expense
(slide 5 of 8)
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Depreciation Expense
(slide 6 of 8)
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Depreciation Expense
(slide 7 of 8)
increase increase
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Depreciation Expense
(slide 8 of 8)
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Effects of Omitting the Adjusting
Entry for Depreciation
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Example Exercise Adjustment for Depreciation
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Summary of Adjustments
(slide 1 of 2)
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Summary of Adjustments
(slide 2 of 2)
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Adjusting Entries—NetSolutions
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Ledger with Adjusting Entries—
NetSolutions (slide 1 of 4)
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Ledger with Adjusting Entries—
NetSolutions (slide 2 of 4)
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Ledger with Adjusting Entries—
NetSolutions (slide 3 of 4)
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Ledger with Adjusting Entries—
NetSolutions (slide 4 of 4)
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Example Exercise Effects of Adjustments
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Adjusted Trial Balance
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Adjusted Trial Balance Illustrated
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Example Exercise Effects of Errors
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Analysis for Decision Making:
Vertical Analysis (slide 1 of 3)
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Analysis for Decision Making:
Vertical Analysis (slide 2 of 3)
$12,500
= 0.067 or 6.7%
$187,500
©2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Analysis for Decision Making:
Vertical Analysis (slide 3 of 3)
$169,005
= 0.282 or 28.2%
$600,233
©2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example Exercise Vertical Analysis
(slide 1 of 2)
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Example Exercise Vertical Analysis
(slide 2 of 2)
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