dddddddddddddddddddd kg 3 a sect NO. sssnnnninn _ CHAPTER 4: Banc Firanctal Aecduuiing : & Reporting Adlivrhing th, Account. L ay What is heant by petiadierh, Concept? - A coomteg ingar barton us Valued when itis communicated early ehovg! fo be ured por econon’e dec inion making, To provid’ 2 Fimely Ihpenshon, accombauhr have divided the econonic lige op a burner jie -artipina) The er tods thir a prumphen iz re peered to ap the | pynedicity concert v) Digperenhete pice! calendar and natuel busi nage yeay . [ — Accouwhny pertodr ove generally a mouth, 4 9 arb ar F y + et year: (he mort bante a coouicht peniod ir one year, Batter Abeer ih Their choice of the arccounting year —— fiscal, Cahendar a _natvral, A} pircal year ira petied of any twelve _conre whe mont 1 “Bh cakeadar xy ear ivan aunval_periad ending on Dee 3 ' hi nature bunnese year i at elve ol h _peried. Tad Loeendl whee burhenr achivitier are ab their lower © level og he cnnval cycle. 2\ Vhat are adjurting eutriep ? Why ape iad/ulihg erhNes ny cee ary, = hecourtants male ciel usting eedrier dd re ect} The ceountriapormaboh oh @Cohomie ack tee hut have occorred but have nok yet been re corabed el jurting eubted arigh pevenver to the period in. which they are 2arnc ' and renter ty Th, hia, fa _whtch they are incurred, There euhier abe needed t measure properly the prap't pov the period , ave ty brtry veluked asret avd lealy ity accouwks dy correct balancer for: Me _f'wamore Nabement, t, Phot adjurtmenke aye heedeo to enrvbe tot the pece ifvn aya dere cognition pri cipher are pollawed thup retultieg h picancia] plete tueutte (reporting +r CL pects ian tranra tions gt . the end op the pera 6): Cite the dite re nery between defreraly « and acomal. e es esl ase i Beef fk VAAAADATAIVIDIDADINDGNATANTHANAAD *DATE ... NO... ag” ‘an experre alyeady | patd_ Gor, Tr sactared 7 . Stop" veveive alyesdly, collected bi bit Mh wot y yet earned earned thie adjurk went deals with an amount oak oleae Ine coiled 3 ina balance ch vel accourt ; the eitry, fh pgecky decreares The balance sheet account and _iherearer an (come Shabement account \ W ~ keevyal Vhe 4 recegniten op op an evpenre al racy incereed but unpaid” ov revenve aad but uncollected ~ Ther gdyurtn ent deals with An amount unrecorded /h any account, the oalry, in eprect, iherear er | betha balance rheet and an thcome patement acco. / Eee f 5) Rd jurbivg | entries ate nredvd when depervals awd acervals scirh Elonerate tre wo prittipea | Sidvahiesr under each Hat requlre ahurrivg enbier, Vecervals vould be needed in two carer! 1. Allocahing arrelr to epenre to reglect OXpenrar incurred, durivo fe ceca pial 2.9. prepaid tht e, Supplier and deprict aioh| 8 6 2. Macating fevenyer Veceived in advance "revenue dy 6 veg Ld coven cerned dorivg the accounting pentod s le 4 rubrcriphons ! 2 _ Gets wi | kLey - bk ‘Aceomvals” vould be ‘veyed we covert eth - \ eos 1 heetving expower ty rather exponrar “incurred Jenitg © 1% the fccrunhtg penal tat ane: unpaid avd. vavecetlee)- . rt as _ahecrving reviewer b recledrevenver earned : sj du ing pre accont ty period that are uh Calle oo] ° _ ; = x an Vin recorded. . NX a = it ea i) Fecoyhe receivable thuh is doybt ey! if collechon | 4 rheld be provided an alance, Wh h hook ta. yy EP + BRAT Curvy shev f Thy acenboud make? ee _ ‘ = Bowe That an culty ede cali rale, ep P|, 100000 jn 2671 and Thor_experlence tcl code b an expr eter 499098 1% _avevago uhco lecbhle Coun a bared om Creel Tales? The cora nad fe - (a Allevance or Yncolhecdyble Accountr bapa toroal chegib al Dalance “and ir chown inthe balance sheet ap «ll deduction prom Accouny Reces imble, The alloomce © ll accounh need te be jncréared by Piljooe (Ply 106,005 x1 ell _Pecaure accouty receivable in fhZP anoink indole colle The adjurtmenk will be! 1 2 - Dr Cr, e i Uncollechible Accountp Exper pe TT, 0.00 «| : Allevauce for Oncdleok ble Account 1,00 Ri yh wg contm acCoud 7G) || 7) Phat wo g_co ou (five anlar op ‘i accounts llr a ww Sc 7 ]DATES sactsnerseneresoeeseetit NO dusinassarensese ~ Ricoutre Account jruUsed b reced ve duchonr - Oy ~ ina pela accont oud iAP yormetl balabce if -20P09 He >that or the peborbed account, Samy 4 the Conta 6 ccd s ots acutyevlated oly peicl Aone ” 5 Walla auce fdr Uncollecdble atcoundy! ~ . Tila [.0 the adhutitg entries weld dipper ip ae priest or a two yeqr ihvmnce palig ( in v iz initially ce covded Or en arefor as 4b, = lps “ C = On < tbeer mS Nada Coin yp, - ; egy. hh Puro in cd @ ‘al a3 Pe, fetal ree %y id ayn Cy, eae ely hate Chenditg en whe vino ve if walls The, 40! aS. payee = may Sate "s veoa bad either oF au narel fe at an Exp enre [ Tattrol etry is pecorded ap: ree L, Te Ay oppet a) TH8 zon _ 3 _ Oct | Prepaid La rvvance (4) 40, 000 ne Carh £0,000 ag Kw gypeure as a 24721 Tay Ce] Taare Expenre (0C:6) 4, 000 ve Cash 4p, 060DATE woseesssenee 2 NO. csecescssserssconssses, a the end op the your, a @nhy i> nel year, aw ad" 3h aa fo elablich 1 ihe Pe_proper Vbolenc sng aid. é “ngvrence and ikew LBe ron. ee epene psooti De Pec. ve 20 ert three months! irs ape tw Lose cohrvmed Or ‘manlras expenre iS_equa (Cat o00/ 4, nowt hs x3 hy ie c eqwinglent ta ¥25 000 ( P40 000 - 7% ode ina ns Thy A phrapt ike, adyehn ee depend oh how The incfial traction, _ war pecorded. Adjurheg entry cequices ip nikal euhy st ricpylod at? hn asset 202| Var Bt Tycuramce Eyyenre (06-6) 5,009 “ “epi d Terrace CH 5,600 6.3) Prepaid Tarvrouee Lh) 35, COy Tarveonce © pears Obe) 35, 090 the eppeck 4 oe tf ad} jects on ‘i suthe ledger acceuchr 7 a pO Raye be Jv hpor he ing-picel Ape apler pactg J bel Oy” Aso ot ‘Dec?! te sa Pre pais i.pviah 6G 3 “Sd 74 TRE: SDncverace Expen “he an Expewe De 3! baanger: Prepaid Tarvrnmew 35000 fit 5, 000 Jeb t 4) Tlvdrnbe hew The adjvrting eatrien weld dfrer lp _ the ve ccin_og 9 thees jem teak revenue 1S iniFially record ed asa liability or 8 pevenve. 6» Jul |, 202\ Mavasigan (ay, 4 he ceed 4 {8,008 check for yeare pent paid ih_gdvauce, — Ow This dake, Mare cigan mqy recotd a eredlit jn That amount either ar vneaned rental pevenve or pental pevenve . depending on_ite qecouuting Peliy Tnitial_ entry is vec onde) ar: fh liability 3 Tak he ly | 220 o ‘Gh earned Rent Revenves (U) | TF, 006— DATE A yeven\ye : WOU Juy\ Cah 48 G0 _ _ Rent Revenver WED 4€ O00 Bt the end op The year an adj uring entry ic weeded to ecbblirh te ereper b lance in the pest | prewrenve ond veered rent revenut accoudme OF Dec 3), Y62!, iy mpeths red or been comes, Or bent pevewve is egualle P2000 (P4P,000 136 wouthye Yb months). Uneamed rent revenver 2g vinkut b € Y. 40, 000 (48 200 - £000 } rémaih, The. ppropnare € cdjuriment depends _on how the jnidiq! Hranrachiow’ ‘ RRR nrrnnrnm J 7 war ye corded Prd wwsting entry reavieed 1p inityl xuby_is recorded 7 Kent Revenver (OE ;T) #, 000 — as é A liab lity : New. PT Unearned. RentRevenves (L) £008 1 ‘—— DATE vesssneunenenne NO. . "he rernve —_ - een - —_ — Dee FI Rent Revenver (OE: T) {2,000 Un earned Keut Revenver (L) 40, 500 the effet othe ad justin entree on the le ger aCCoonts Apter porting is the Fame regardlenr, Oe the swihal eredite as rhoen below: Ar 4 Lin bility | De c 9) balaucer: Unearne Rent R evenver f0 eco cred t Rent Pevenver — F 200 credit Kr an Tacome Vere, 21 pabnces? rev,eebeausbeeuuunuaunnaeerereerere Unearned Ket Revenve fo, O06 preAt Rent Revenves b , Wo credit jo) Discure the concept op deprict ntign, What ave the choy to be cenpidered in Computiog por Sepp ictahog ekpenre) — Senet~ DATE oss 7 Whe nu _zuchity “gcqwires ‘long = arthele Such ar buldsayry pervice vehicler, ompeF2L or buying oF opel’ fornidures, it ps basically : repaying we the yrepulnesn op That avie“s —— fF £ slp generate [heme por the ewhity, | _ Ther ervey 7 G Therepore, «portion 2 fhe cart of the as caro, ere _s heuld Ie vee tel ac expance in Coch accoutig “pets Iroper_acconHily re vine alert —cort op the aret oy er ibe Pe Nnake vtepl ge. The ive. [le eartinerbed amount allocated do pug 2he accounhlg | period jsealled deprictation oF Ie nceath'on expew"e hee partons are involved in com patity depwic totion | _ekpewe 1 Aret cot iv the amount au entity paid b Cg yive Hog deprictgble asset 5 Erlawked paludge valve jp The qmoywt Sret the eset can probably be sold por atthe end oe ib eHreched urezul lize. i" 3. Phivated vrezul lipe_tr Fhe enh mated nbs pert pervods Vat_on eatty cin make wre ag Hae mel pe gol lige am ennete pret ani vxth mecirurreg yy the a. coouyrtet a led de record a cowed ret on nober payable | whith ae the [hCOMO enna oaa oadgaa ‘yas i AU AD AD ai 4 DATE cecsscssssessssnnsssenesses NO} ssssessestervensnssonn _e¢pedt og Thy © ab srlol “on the prancial * pdate mets 2 Thuphration Ow Joly I Loe!) Cabuyao Axon powoty Dervicer poued hy Wark Blanche Uermur el» P00, 500 by —figntsg an le-nohth pote ab 1b% 4 e peep and _iuberet are mafurer oh Dect 3], 2022.) iateret per_annvm, + be repsie vhen the no fy at_Vec- 3) 202) | the enhly hha tucurped. jyheed ~ expente_og Pf,000 (Pl00,000 xlb% X b/2) The accountant did nit recerd dae ady'urtu ent far thy accrved jhhepert, The entry pheuld have been’ 4 debit hb Ln terert Uxpenre awl a credit b Dantetest Payable fer PF, 00e- , The fect of the oiler ih he zor { farin cha Shalempa are ar cellemess > Tn the 202) trome platenent , tnpe rer wipenre in underabed by PF, 22 and, Yooregere, preg it is overrated by PP, veo. > tr pre Deo, 31, 222) balance Sheet genery equity ib over rtibey b P£,000 bec qure ye The overleignent in progit Lek) lighilthier it vndetnllyad beca we _og the omicton ty THe Pp P08? inherent spayable a Stce DATE -ssccsecessseereerenee NO. ssecssssseenensssteee Ee ooo Phe” Ts “Ou Wee 3(, 2092, fhe maturity. dake, Pewee ie & said Aegetior with inhenest, ket ar ne Jadjochug embry made to eccrve Tererk in 2021, Vee en Sue interest Of P2 F062 CPI, 060 lee X - AR[2) war efroneeorhy charged _ggainch 01k pep Thy correct interest oxpenre Per Voit phew been PL), 000 | P 100, 0A 6% [2/I2) The epee of Phe omystious ih the 2622 fimbetal rake merits are at follows: & Lathe 1022 jucome statement, inh pest eps pe over tuted bi P5002 and Thereore, peogtt a _ypiderrtabed by 18,008. : > The Dee. 31, 207% balance sheet iv come cHy Pted Ange the wohe along vith ike Ihre has been tetHed b yearmend. The eypect og Tue ombpion Was canbarbalavced bu the end o¢ the _pecond aCcounh Wd, petiad- ; 7 Tn Summary , Hue _praorton hur produced two chrenecue f incomw platementr ancl on pvronwour balance thet, Ate ebb zhovld have re pted 4 correct prog 2p POO8, 000 jn the 22) an) L022 income ako hen he awecult op the amir tol, te propre fark ips i wit } progit jh 22) iS £506,000 gndih Lo BD. PF9Z, 002. 2 a BE BEBDBBBDAAAARARSSS ere sess, eer pers VETTTTFTVTECTCSCCVCVHHHHHHHH HEHE DARA oe ee DATE vssmnnnsrninans NO: ry tg thy ‘accountant failed 4 record ing Op Cornpobel equipment, what ts Phe egpect of thie Ouiecioh ey the firncial rhahan ends? equi aon up sWetion the borinere has ouderslated ay ra awd thid will Ippect Vne Pog it L lors account becove deprictaron expenre wedrle be adjwred Alre, a) Mrpeks Unde ste? and Eg vity Over ruked . Creclite ne Vindiet pbahed. b) Expenses urder thot , Lucome Oversparbect F4.city OVerrtarbed Pn ad jwrtibg eertrig is_Meed ec) for fhe acevinihdn OL Computer £9 upiveud , chediler account needr ti be adiurtt _depriciabian shald be charged ro Pech rhemy ow re piv elle ave couject B) Ip the ewhty pailed to make au adsuctitg entry wil he Wia balapee bein balance 7 our se wot vithout 4 justibg entries fbn cial = ben Ceol Ste femedt may wot pairly haw the rolven oy op the entity. nthe balance Fheet and the pregitr lity he agus