Slide 2-1

BMGT 220, Discussion #3 – Chapter BMGT 220, Discussion #3 – Chapter 22

Kristian SooklalKristian Sooklal

kristiansooklal@yahoo.com

443-797-4588 (cell) | 410-575-4719 (text)443-797-4588 (cell) | 410-575-4719 (text)

Slide 2-2

Important NewsImportant News

Wizards vs. Nets (home game) tonight at 7Wizards vs. Nets (home game) tonight at 7 Request tickets to Clemson basketball game Request tickets to Clemson basketball game

todaytoday Virginia game on Sunday at 1:00 pmVirginia game on Sunday at 1:00 pm Wizards beat the Knicks, 106-96Wizards beat the Knicks, 106-96

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Topics in Chapter 2Topics in Chapter 2

Double Entry systemDouble Entry system Debits and CreditsDebits and Credits

DEADDEAD COLRCOLR

Normal BalancesNormal Balances Beginning Balance Beginning Balance Additions and Additions and

Subtractions Subtractions Ending Balance Ending Balance T AccountsT Accounts Posting Posting Trial BalancesTrial Balances

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Plan for todayPlan for today

Quiz 1 backQuiz 1 back Financial Statements Financial Statements Knowledge Check QuestionsKnowledge Check Questions Review of class notes + homeworkReview of class notes + homework Any questions?Any questions? Quiz 2Quiz 2

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After processing its remaining transactions for December, Scott company prepares a Trial

Balance.

After processing its remaining transactions for December, Scott company prepares a Trial

Balance.

Debits CreditsCash 3,950$

Accounts receivable - 1,500

Supplies 9,650

Prepaid Insurance 2,400 Equipment 23,500 Accounts payable 6,200$

Unearned consulting revenue 3,000 Common stock 30,000 Dividends 600

Consulting revenue 5,800 Rental revenue 300 Salaries expense 1,400 Rent expense 2,000Utilities expense 300 Total 45,300$

Scott CompanyTrial Balance

December 31, 2011

The trial balance lists all account balances in the general ledger. If the books are in balance, the total debits will equal the total

credits.

The trial balance lists all account balances in the general ledger. If the books are in balance, the total debits will equal the total

credits.

$ 45,300

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Stmt. Of Cash Flows

Income Statement

Stmt. of Ret. Earnings

Beginning Balance

Sheet

Ending Balance Sheet

Using a Trial Balance to prepare Using a Trial Balance to prepare Financial StatementsFinancial Statements

Using a Trial Balance to prepare Using a Trial Balance to prepare Financial StatementsFinancial Statements

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Use the Trial Balance for Scott Use the Trial Balance for Scott company to prepare its financial company to prepare its financial

statementsstatements

Use the Trial Balance for Scott Use the Trial Balance for Scott company to prepare its financial company to prepare its financial

statementsstatements

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Income StatementIncome StatementIncome StatementIncome Statement

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Statement of Retained Statement of Retained EarningsEarnings

Statement of Retained Statement of Retained EarningsEarnings

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Balance SheetBalance SheetBalance SheetBalance Sheet

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Knowledge Check # 5:Knowledge Check # 5:An accountant for O’Leary Company enters a transaction in which she debits Accounts Receivable and credits Service Revenue. What type of transaction occurred that results in this entry?

1. O’Leary collected an Account Receivable.

2. O’Leary performed a service in exchange for cash.

3. O’Leary performed a service for a client and sent a bill for services rendered

4. O’Leary wrote off an Account Receivable that it expects not to collect.

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Knowledge Check # 6:Knowledge Check # 6:

If assets and equity have both been reduced by equal amounts in the same journal entry, what is the most likely explanation?

1. A fixed asset has been purchased on credit.

2. An invoice has been received from the cell phone company.

3. A supplier has been paid.

4. An owner has received a dividend.