Course content 1 .

Accounting inaction
2 .
The recording Process
3 .

Adjusting the Accounts

4. Midterm Exam
5.
Completing The Accounting Cycle .

6. ( Chapter 5,6 )
Accounting for Merchandising operations
7. Statement of cash Flow .

8. Final Exam

Accumulated Depreciation ki -

troy Asset
Account
( Asset Cash Equip + Depreciation
Supplies
+
+
Reevei
-

= .
 Chapter 1: Accounting in action
Objective 1 : Users of Accounting information
✓ t

Internal user External users

( Make decisions for the entity (Make decisions about the entity)
" "

Managerial Accounting is concerned with providing Financial Accounting is concerned with

measuring
information to managers or other internal users and communicating information about business
activities to external users ( Financial statement )
-
Managers Theo slide :
>
.

Officers Finance Investors .

Lenders
<
-
Sale
staff Marketing Creditor '
Shareholders
Budget Officers Human Resource Customers
• '

Controllers Manangement
'
Government
'

•
Internal Auditors '
External Auditor

Internal
HR
, Marketing ,

Finance
Internal -
Human Resources

External -
Investors

Internal Users Management

Internal -
Finance

Internal ( Because talk about price)

-

Marketing
External -
Creditor ( Bank)

Communicating with companies prepare 4 financial statement from the summarized accounting data
Users .
Income statement
3
•
Balance sheet
,
objective
•
Retained 2 Earning statement
- Statement of cash glow

'
Income statement report revenue and
1. Income expenses for specific period of
a time
statement -
Net income Expense < Revenue

- Net loss Expense > Revenue

subtraction

=
2. Retain 2 Earning Net income is needed to
statement determine the ending balance
in stockholder 's equity
f
specific period of time

3. Balance Sheet : Asset = Liabilities & Stockholder's Equity

I
Prepare in Specific date

Balance sheet can be

called statement of
financial position

4. Statement Of
Cash Flow Use Statement of CF
Recorded in period of to
time

3 activities

€
 Sell → Cash T → Asset T → Revenue T
(while Revenue
belong to owner Equity )
→ Owner's Equity T

Ob 4 : Accounting Equation .

Assets = Liabilites + Owner's Equity

Paid in capital
stockholder 's equity
Retained
Earnings
Assets = Liabilities + stockholder 's equity
Assets = Liabilities + Paid in capital + Retained Earnings

'
*
Definition :
-
Stockholders equity is divided into 2 main
categories
-
Paid in
capital is the amount invested in the corporation by its owners .

The basic component of paid in capital is common stock .

-
Retained Earnings is the amount earned by income -

producing activities
and keptfor use in the business
-
Asset is Sth which future economic value
a
company owns was

-
Land
- Building
- Equipment
)
'

-
Good will Choi the thing m.aidothghie.ie mang dén
 Liabilities sth outsider claims
" "
-
is owes
a
company -

' "

creditors claim Payable

"

-
Accounts

-
. .
Payable → Liabilities Payable
Notes

Wages Payable
-
Owner 's Equity Taxes Payable .

Owner Investments -
Capital Paid -
in

Owner 's claims Owner withdrawals

on asset Retained Earning
Cui chui Revenue Sales
"

ai Payable
"
'
:

la-thu.io liability .

☒ Performance Of Service
Rent
(A)
Interest
(E)
( OE )
'
Expense Salaries & Wage ( L)

☒ Utilities
( OE )
( R)

supplies used IN

Advertising (A)
(E)

Analyzing Business Transactions

Bt side of the
• key points the two

equation must be equal

•
Invest 15,000 Cash
Cash T = +1,5000

•
Share capital 1^15000
C- Equity
 Néu hi Receivable / Payable
'

Note : co Billed , on account , invoice =) ghivcio Account .

 Example :

tBB Homework P 1. 1- ( Page 1- 421

P 1 .
1 → P 1.4

Aib : Total Asset =

Liabilities +
Equity
Share ( Paid in capital or

c) Capital Additional Investment)

Equity /
Retained Earning

From 1st Jan to 31st Dec , equity change :

400000 -

250000 = 150000

While Equity = RE + Capital

Capital = 150000-100 000 = 50000

What is Accounting ?
Contain 3 activities :

Identification -
Select transaction

Recording -
Record , classify , & summarize

comuni cation .

Prepare accounting reports .

Measurement Principles gia lui

'

> mua

#
.

{
2. quyta-ido-ila.jo Historical Cor cost principle ) dictates that companies record assets
Principle
Chen tradeoffs at their cost Nguyen tai gia goé Mua lbaogc-imcadv.ie Keim Theo ) hit bnghibaynhiéu
'

- -

giua relevance Fair Value Principle states that assets e liabilities should be reported at fair

faithful value (the price received to sell asset settle liability ouyta-igtr.ih.jp ly
'

2 an or a -

↳
th.ilniongluilinhcaitheioaoho.ae thap
'

representation .
= market value =
gia him giabecmua
Assumptions :

Ngtai tie-in te -
Monetary Unit Assumptions requires that :
companies include in the accounting record
only transaction data that can be expressed in terms of money .

Ntai t.hu?c the - Economic Entity Assumptions : requires that activities of the entity be kept separate
Kinh doanh and distinct from the activities of its owner and all the economic entities -
than

bi.etgiiiakhoanchitieieaiacanhanng-siihu.ie e Chi tien d-Éu tri oho business .

→ Incorrect .
Historical Cost Principle
d-a- fair value pnnthi correct .

Unit Assumption
2. →
Monetary .

correct

3. Incorrect → Economic Entity Assumption .

* From of Business Ownership :

*
Accounting Standard
International Accounting Standards Broad CIA SB)
Determines International Financial Report Standard
-

Used in 130 countries

-
( IFRS)
Financial Accounting Standard Broad ( FASB)
-
Determine a- A AP
-
Used by most companies in Us .
 The Account
Chapter 2: recording process Steps in recording progress
The trial Balance

1. The Account .

Account Name
record of

|
Definition .
Account : A increase or decrease in Debit Cbr ) Credit car )
a specific asset , liability equity
, ,
revenues expense
T -
account #
'

Accumulated Depreciation
'

Some special Account .

-
Gia t.ihaom-onhiy.la is a contra account
C- Asset Cain Credit nhoin asset!
'

d-ingui.io t.aiquyke.at Debit , aea

Asset = Book value -

Acaemlated Depreciation
gia )
'

ltrguyén
'
Prepaid Expense :( Chi phi 'tratniÉc ) is Already paid 2 use it thegulure
/C- Asset group .

•
Unearned Revenue - Doanhthuchuathuchiép - Receive money in advance

C- Liability .

Balance in 1- account If Debit amounts > Credit amount ,

the account 'll have a debit balance
Account Name
Debit Credit
Trans (e) 15000 3000 Tran (2) Debit Balance = Debit 1 -
Credit .
.
.
+
Debit
Trans (3) 8000 = 15000 -

3000 +5000

= 15000

Balance 15000

Debit < credit credit balance Account Name

(e) toooo 3080 (2)

Credit Balance =
3000 -

10000 +8000
8000 (3)
= 1000

Balance 1000

Rule for Debit credit Debit credit

} }
•
Asset • Asset Normal Balance on Increasing side
t
.

•
Dividend T •
Dividend
•
Expense •
Expense

}
Liability liability

}
•

,
•
RE RE
✓

•
Share capital Share capital
•
Revenue Revenue
 3 Quytac Vie't Debit tnioic credit
'
, San

E Debit
-

Trong 1 transaction E Credit =

credit bionriétléchhang
•
Debit a .

Example

2. Step in Recording Process

a) Journal

b) The Ledger Contains the entire

group of accounts maintained

by a
company

C.
c) Posting Process of transferring amounts

from journal CAH account together

in a table) to the ledger accounts
( Each account in separate table)
Chart of Accounts Accounts and account numbers

arranged in sequence in which they

are presented
statements
in the financial
€
C. Each account has a number )
Each country has different chart

of account .

The
recording process Basic Analysis
illustrated .

>

Equation Analysis

Debit Credit
-
<

Analysis
Journal
Entry
Posting a

Example of
A
general Ledger
 Time Issues
Chapter 3: adjusting the accounts The Basics Of Adjusting Entries

The Adjusted Trial Balance

and Financial Statements

Time Period Assumption Accountants divide economic life of a business into artificial time periods .

Ctime Issues) Generally a month , a quarter ,

a
year .

Fiscal
year =
Accounting time period that is one
year in length .

Calender year =
January 1 to December 31 .

2. Accrual Basis .
Transactions are recorded in the period when the event occur

Accounting Cco Éo '

Revenues are recognized when they perform service ,
rather than when
doñtiéhkétoain) they receive cash
•
Expenses are recognised when they incur rather than when it is paid

VD
'

:
Ngaig 1512 Sign contract tri
.
gia 30.000
2212 transfer product to customer Record Revenue on 2212

2812 Receive money of contract

> Accrual Basis Accounting is accordance IFRS ( International Financial Reporting standards;

3. Cash Basis Revenue recorded when cash is received

are

Accounting :
Expenses are recorded when cash is paid .

↳ Cash basis accounting is not in accordance with IFRS .

We shouldn't
apply this principle .

Recognizing Revenues Recognition Principle Recognize

Revenue :

which
and Expenses revenue
accounting period in
in the
Recognize
the performance obligation is
satisfied tho'a - → revenue
•

main not nghiar.uth.uchie.in ki nhqi cam két -

here

trong hop doing ré ri.ec chuyéngiao having hoa

'

di.ch 1-→ -
i v4

Matching Principle -
Expense Recognize : Let expense follow the
revenue .

VD : nha.jo 10 Mtirih 10000 / each

1512 ,

2212 baidu.EC 6 maig tinh 12000 / each ,

Expense phaid-ui.io linh trén so hañghoa d-ui.io bi

'
↳ 6 computers
→ Expense 6 × 10000 = 60000 .
 Sumarry :

:
:

2. The Basis Of Adjusting Entries

1- Why we have to - To
follow revenue 2 expense recognition principles data
✓
adjust entry .
Because the T balance may not up to date and contain complete
Required every time company prepare financial statement
Adjusting entries include 1 income statement account -

1- balance sheet account

1. Chi phitratnioic :
Troi →
Ding
2. 2 Doanhthuchua th.uohi.in Troi
Types of Adjusting . : →
Giao
tich big Troi

{
Entries 3 .
: Giao →

tra
'

rent , insurance
4. Chiphi :
Doing →

all eg
Beyer
:

a) Prepaid Expense Step 1 : Debit Credit

Supplies 2500

Cash 2500

step 2 :

Debit credit .

Supplies Expense 1500

Cain !ai) supplies 1500
 Debit Credit
Example 2 :
Prepaid Insurance 600
Cash 600

Insurance End
Of October
Debit Credit
Insurance Expense 50

Prepaid Insurance 50

Depreciation

Sumary

Debit credit
b) Onearn Revenue 2. Oct cash 1200

Unearnre 1200

31 Oct
. bnearn Re 400

Revenue 400
 1 Prepaid Expense
2. Accrual Re

3 .
Accrual Ex

4- On earn Revenue

1 Debit Interest Ex ,
Credit Interest
Payable

Receivables
2 Dr : Service Re ; Cr Acc
Dr
Expense
.

Wage Payable
: Sa ,
Cr

H Senary :

Some special cases

& &

{
Coin supplies = sooo supplies
1000 T
Duñg hit 1500 supplies
do thang record sang expense
tnioi Expense 1500T Aurigthiphai
ninnhuimoi debit debit 1500 siia Credit

= 1000 d- É Balance = 2500

1000 = 1500 =
otung
than
'

expense tang bis frog thg

 { 4

loin 800 £
coin 800 Chia -

Hm?chief

a
team xong 400 f
lain dui.io 400
moi ohuésghitigivao
Revenue nets ghi

1.

2. Assumption

{ ,
3. Principle

3 situations cost > Benefit

y cost < Benefit
cost = Benefit
 Chapter 4: completing the accounting cycle

Temporary account
appear
•

in income statement
we divide all accounts into 2
types :
- Permanent account
appear
in balance sheet .

% Only temporary need close at the end of

to a
period .

VD : doanh thumann 2021

0-d-i.eoc.co?ngd--n.v-ao2O22nenphaicloseraoceeo-i 2021

Posting
Closing
Entries

Step to close Entries

-
close Revenue to Income summary .

-
Close Expense to Income Sumary
-
-
Close Income Sumary to Retained Earning
' Bring credit to
close Dividends to Retained Earning
Debit and vice

versa
Closing Entries
Template

µ
=
10600-7740
5. Adjusting
 Classified statement of Financial Position

Asset Equity and Liabilities

Intangible Asset Equity

.
- .

Property plant equipment

-
I ,
.
Non -
current liabilities
-
Long term Investment .
Current libilih.es .

•
Curren asset
 Chapter 5: Accounting for 1. Distinguish services
Recording
&
merchandising company
perpetual
of Purchase
2. under

merchandising operations inventory system

3.
Recording of sale Revenue ~

4.
Step in accounting for mech andis ing company
5. Distinguish multiple
:
steps single steps income
statement

I. Merchandising company

Merchandising Company Ctg barite )

'
•
(
wholesale → Retailer → Consumer
the primary sources revenues is referred to sale revenue or sales
of

Income measurement
-

of merchandising :

Because of inventory , merchandising

companyhas : Costof good sold,
sale revenue
, gross profit .

Distinguish :

Service Com
&

Merchandising Come

To count
inventory merchandising company
,
use either a
perpetual inventory
system or a periodic inventory system
•
Perpetual system :

Maintain detailed records of

-

the cost of each

inventory purchase & Sale
Records continuo sly show
-

inventory
that should be on hand for every time
-
Companies determines cost of goods
sold each time a sale occur
-
Periodic system :

-
Does not keep detailed records of goods on hand
-
Cost of goods sold determined by count
-
Calculation of costof goods sold Beginning Inventory: 100000

Add : Purchase , net 800,000

Good available for sale 900.000
Less :
Ending Inventory 125,000
Costof good fold 775,000
 Example On 1- -
March :
Buy 30 computers Ceooo $ teach ) for inventory
on 9- March : sell 21 computers ( 1500511 each )

How werecord this transaction G)

ghinhc.in 2 bit toan (2)

II. Recording purchases under a perpetual inventory system

-
Made
using cash or credit con account
'
Normally record when received from the seller
a- are
-
Purchase invoice ltloadoñmuahang ) should support each credit
purchase
Example .

When purchase inventory ,

Debit Inventory
Credit -
Account Payable
or

cash

2 types freight cost

of
a) Freight cost •
Shipping point Buyer pay :

cchiphira.is chuyéis ) freight cost .

•
Destination Sellers
pays
:

freight cost .

←
]
Appear on

Balance sheet

Appear on Income statement

Example
shipping point
PW Audio : Seller
Sauk Stereo Buyer:

Destination

Nñi ta sniping point thing uÉi nguioimua Db

Inventory ,
Cr cash
destination thing bars Dr Freigh -

out
,
Cr cash .

b. Purchase Returns
and Allowances .

←
Troi hañg

A Tro? coipmuahañg
a

hii him
chop

→ Purchase
Sauk Stereo ( Buyer, Return
should record )

C. Purchase Discounts :
Credit terms may permit buyers to claim a cash discount gro prompt
payment
Advantage :

Purchasers saves
-

money
-
Seller shortens the operating cycle by converting the accounts
accounts receivable into cash earlier

Example : credit terms read 2110 / 30

may , n

-
2110in 130 -
2% discount if paid within todays ,
or net

amount due with in 30 days the first

✓

-
1110 EOM - 1% discount if paid within to days of next month
- n 110 EOM -
Net amount due w -
Example of purchase
discount .

If there is a discount ,
we should take it .

Summary of PW Audio .

Purchasing
Transaction

:
0

:
 III. Recording sale under perpeptual system

1. How to record sales

of merchandise

2 bit toair coin record

Ichiban

Example :

/Cash

"

2. Sale Returns purchase returns and

"

Flip side of allowances

Sale Allowance Contra -

revenue account to sales Revenue (debit) Up T Credit .

Sale not reduced ( debited ) because

-
Would obscure importance of sales return and allowances
as a
percentage sales
of
-
Could distort comparisons between sale in different accounting
periods .

How to record Sale

Returns Allowance .

→
Mang ré duñgléip
Lainngi.iocl.ae Ichi
'

so vs

bain hang nhiing sale Rev

thay baaing Sale Returns Allowances

The lower the sale Return & Allowances , the better

→ Gia '

hi thuhoiaia spain
.
3. Sale Discount customers prompt payment of the balance due
the
Offer for .

Contra -

revenue account ( debit ) to sale Revenue sale Dis up credit

.

Net sale =
Sale Rev -
Sale Returns & Allowances - Sale Discounts .

Example

-
Contra Acc

IV. Steps in the acccouting cycle for merchandising company

1. Adjusting Entries Same as a service

company
for cost of Good
-

-
One additional adjustment to make the records agree with the
sold .
actual inventory on hand .

- Involves adjusting Inventory and cost of Good sold .

2. Closing Entries

New
 V. Distinguish between a multiple step and
single step income statement

1. Multiple steps Khong qing Chung expense hétraovsnhauma érieñg

d- Cost of good sold
voi
operating expense .

2. Single step ( Nhu moi khi

'

hay Cain )
Compare Entries in Perpepheal System & Periodic system
 Chapter 14: statement of cash flow

I. Usefulness & Format

statement of
cash glows provides information to help acess .
.

1. Entity 's ability to generate future cash flow

pay dividends & meet obligations
2 .
~ to .

Reasons for difference between net income

3 .
& net cash provided
( used > by operating activities
4. Cash and transactions
investing financing during the period .

Activities Activities
Classification Operating -
Income Statement

Investing Activities -
Change in Investments & Non -
current Asset
Financing Activities -
Chang in non -
current Liabilities & Equity .

1. Operating
cash in
glow -
From sale
of goods or service
\
Hot
'
Ira lai cho From interest received and dividends received .

ngañ hañg C-
Operating cash outflow -
to
suppliers for inventory

✗
Activities to
employees for wages
government for taxes
to

to lender for inters rate

to others for expense .

2) Investing Activities - Change in Investment & non current asset

liabibilitieseeauityphatha-nh-b.ci
3.
Financing Activities -
Changes in non -
Curren
 Example

N E
Operating
Operating Out
In
Investing
Non cashe-ko-lauard-e-n.SI -
NC NO

1.
same →
-
Financing

NC
out

NE
IN
Operating
Operating NE
O Out
-

effect 0
No N F-
on class glow

III. Prepare the statement of cash flow by Indirect method .

Why indirect method ? Companiesfavor the indirect method for a reasons :

1. Easier and less costly to prepare

2. Focus on differ en between net income and net cash from
operating activities

Depreciation expense -1 : Add Loss : Add

cash received the sale (disposal ) plant asset Gain Deduct
from of :

Account Receivable t : Add

Inventory T : Deduct
Prepaid Expense T : Deduct
Account payable T → Add
Income Taxes Payable to deduct →
Statement of cash
Flow template

:{ gon:(pgsanginon
disposal
:{
Semang : Positive rela Depreciation expense Negative rda plant assets
Account Payable Account Receivable
Income taxes payable
prepaid expense