Example 1: Prepaid rent

ABC Company rent office for 10mil/month. On Jan 1, ABC co. Paid in advance for 120mil for 12 months fr

1-Jan Prepaid rent: 120 (asset) dù tên là expense nma bản chất là asset
Cash: 120 (asset)
31-Jan
Prepaid rent: 10

Cash Prepaid Rent

01/01 120 01/01

Bal. -120

Bal.

Example 2:

On Jan 5, ABC company received $2000 from customer for service to be performed in February. Analysis r

1-Jan Cash: 2000 (Asset)

Unearned Revenue: 2000 (Liabilities)

Cash Unearned Revenu

5-Jan 2000 Jan-31
Feb-28

Bal. 2000

2.1. Prepaid Expense

a. Prepaid insurance
Assume: On October 4, Yazid Advertising paid 600 for a one-year fire insurance policy. Coverage began on O

4-Oct Prepaid Insurance 600 Cash

Cash 600

Adjusting entries
31-Oct Insurance Expense 50 (600/12)
Prepaid insurance: 50 Bal.

Befor adjustment
 Asset overstated
Expensed understated

RULE Debit expense (IS)

Credit asset (SOFB)

b. Supplies

Assume: Yazici Advertising purchased supplies costing 2,500 on October 5. Yazici recorded the purchase by incre
An inventory count at the close of business on October 31 reveals that 1,000 of supplies are still on hand.

Oct-05 Supplies: 2500 Cash

Cash: 2500

Adjusting entries
Oct-31 Supplies expense: 1500 (2500 - 1000)
Supplies: 1500 Bal.

Befor adjustment

RULE

c. Depreciation
On Oct 1, Yacizi bought an equipment of $5000, assume that depreciation on the equipment is 480 a year, or 40 p

1-Oct Equipment: 5000 Equipment

Cash: 5000 1-Oct

Adjusting entries Bal.

Oct-31 Depreciation expense: 40
Accumulated depreciation: 40
(contra account of equipment) Accumulated depreci
Befor adjustment

Equipment
Accumulated depreciation
Book value

2.2. Unearned Revenue

Yazici received $1200 on Oct 2 from R.Knox for advertising services expected to be completed by Dec 31. Analy
 2-Oct Cash: 1200
Unearned Rev: 1200

Adjusting
31-Oct Unearned Rev: 400 (liability)
Service rev: 400

Befor adjustment
Liability overstated
Service rev understated

RULE Debit liability (IS)

Credit revenue (SOFB)

2.3. Accrued Revenue

In October, Yazici Advertising performed services worth 200 that were not billed to clients on or before October 3

Adjusting entry
Account Receivable 200
Service Revenue 200

Befor adjustment
Assets understated
Revenue understated

RULE Debit asset

Credit revenue

2.4. Accrued Expense

a. Interest
Assume: Yazici Advertising signed a three-month note payable in the amount of 5,000 on October 1. The note req
Interest per
=5000*12%/12 = $50
month
Adjusting entry
Interest expense: 50 (debit)
Interest Payable: 50 (credit)

Befor adjustment
Expense understated
Liability understated

RULE Debit Expense

Credit Liability

b. Salaries & Wages

At October 31, the salaries and wages for these three days represent an accrued expense and a related liability to Y
day. Thus, accrued salaries and wages at October 31 are 1,200 ( 400 × 3).
 for 120mil for 12 months from Jan to Dec

ma bản chất là asset

Prepaid Rent Rent Expense

120 31/01 10 31/01 10
28/02 10 28/02 10
..... .....
31/12 10 31/12 10
0 Bal. 120

med in February. Analysis revealed that at Jan 31, the company performed $1000 of service.

Unearned Revenue Service Revenue

1000 Jan-05 2000 31-Jan 1000
1000 28-Feb 1000

Bal. 0 Bal. 2000

policy. Coverage began on October 1. Yacizi recorded the payment by increasing (debiting) Prepaid insurance.

Cash Prepaid Insurance

04/10 600 04/10 600 31/10 50
30/11 50
.....

-600 Bal. 600

ecorded the purchase by increasing (debiting) Supplies Expense (rather than to the asset account Supplies).
lies are still on hand.

Cash Supplies Expense

5-Oct 2500 31-Oct 1500

Bal.

uipment is 480 a year, or 40 per month.

Equipment Cash
5000 1-Oct 5000

Bal.

Accumulated depreciation
31-Oct 40

Yacizi Oracle
Equipment 5000 10000
Accumulated depreciation -40 7000
Book value 4960 17000 => Ko thể dựa vào GTSS để đánh giá quy mô của 1 DN

completed by Dec 31. Analysis reveals that the company performed $400 of service in October.
clients on or before October 31. Because these services were not billed, they were not recorded.

00 on October 1. The note requires Yazici to pay interest at an annual rate of 12%.

Interest expense Interest Payable

31-Oct 50 31-Oct 50

Bal. 50 Bal. 50
nse and a related liability to Yazici. The employees receive total salaries and wages of 2,000 for a five-day work week, or 400

Adjusting
31-Oct S&W expense 1200(400*3)
S&W payable 1200
Prepaid insurance.

Insurance Expense
04/10 600

Bal. 600
unt Supplies).

Supplies
5-Oct 2500 31-Oct 1500

Bal. 1000

Depreciation expense
31-Oct 40

Bal. 40

ánh giá quy mô của 1 DN

ber.
ed.
for a five-day work week, or 400 per
Ex 3.10
1. Inssurance expense 500
Prepaid insurance 500
2. supplies expense 250
supplies 250
3. Depreciation expense 150
Accumulated deprecia 150
4. Wages 40
Wages payable 40
5. Service revenue recei 650
Service revenue 650

Income Statement
For the Month Ended May 31, 2020
Revenues
Service Revenue 5500+650
Expenses
S&W expenses 2300+40
Supplies Expense 1200-250
Insurance expense $500
Depreciation expense $150
Utilities Expense $600
Total Expenses
Net Income ###

Ex 3.12
Ex 3.8
1. Accrued revenue
B1Jan-31 Accounts r 785
Service re 785
Before adj Both under

2. Accrued expense
B1Jan-31 Utility expense 650
 Utility payable 650
Before Both underated
3. Accrued expense
B1Jan-31 Interest expense 500
Interest payable 500
Before Both under
Prepaid expense
B1Jan-31 Depreciatetion expen 400
Accumulated deprecia 400
Before asset over
expense under
4. Prepaid expense
B1Jan-31 Inssurance expense 24000
Prepaid insurance 24000
Before asset over
expense under
5. Prepaid expense
Supplies expense 1200
Supplies 1200
Before asset over
expense under

Ex 3.7
3.6
1. Accrued revenue
Account receivable 3000
Service revenue 3000
Before: Asset under
Revenue under
2. prepaid expense
Supplies expense 300
Supplies 300
Before: Asset over
Expense under
3. Accrued expense
Utility expense 552
Account payable 552
Before: Expense under
Liabilities under
4. Unearned revenue
Unearned service rev 260
Service revenue 260
Liabilities over
Revenue under
5. Accrued expense
Salaries expense 800
Salaries payable 800
 Expense under
Liabilities under
6. Prepaid expense
Prepaid insurance 350
Insurance expense 350
Asset under
Expense under

Ex
Closing the bool
Ttemporaty account
All revenue accounts
All expenses account
Dividends
-> số dư cuối kì không được chuyển sang kì tiếp theo
(accounts are closed)
Bước khóa sổ (closing entries)

Preparing closing entries

Long term investment (shares, bonds)
Current asset: dủng hết trong một chu kì kinh doanh ngắn (thường là 1 năm trở xuống) vdu: thuốc nhuộm
current liability: nợ lương, nợ từ nhà cung cấp (account payable)
Non - current liabilities: nợ trên 1 năm (nợ ngân hàng
Land được sử dụng cho operational act -> PPE
Land được sử dụng đầu tư -> Long - term
Inventory là hàng hóa (sản phẩm hoàn thiện), nguyên vật liệu, work in process (sản phẩm chưa hoàn thiện)
Supplies vs cửa hàng qa: túi, gói, đồ dọn dẹp cửa hàng, thuốc tẩy rửa -> vật dụng hỗ trợ kinh doanh nhưng ko phải sản phẩm được bán
Account receivable (nợ cho khách hàng từ bán hàng), note receivâble ko xuất phát từ bán hàng mà từ cho vay
* Đi thi chỉ cần tách phần assets

4.11

Salary and wages expense

3200
5600
Bal: 8800
Supplies expense
600
700
Bal: 1300
Rent expense

3000
Bal: 6000
Insuarance expense
50

Interest expense
50

Depreciation expense
 40

(1) Service revenue

(2) Income summary

(3) Income summary

)4_)Retained earnings

b.
Income summary
13100
5000

Ex 4.7

v
1.

.Finally,
Second, companies
adjusting journalize
entries alwaysand postatadjustments
aff ect only at the
least one statement of fiend of anposition
nancial accounting period.
account andInone
contrast,
income companies
statementmake correcting
account. entriescorrecting
In contrast, wheneverentries
they discover
may inv
Correcting entries must be posted before closing entries.
Instead of preparing a correcting entry, it is possible to reverse the incorrect entry and then prepare the correct entry. This approach will result in more entries and po
Permanent account
All assets accout
All liabilitiy accounts
Equity
-> Số dư cuối kì sẽ được chuyển sang kì tiếp theo
Accounts are not closed

Salary and wages expense

5200 (2) 5200

Supplies expense
1500 (2) 1500

Rent expense
900 (2) 900
Retained earnings

Insuarance expense (4) 500

50 (2) 50
Dividend
500
Interest expense
50 (2) 50

Depreciation expense
40 (2) 50
(1) DEBIT SER REV 10600
Credit income summary 10600
(2) Income summary 7740
S&W salaries 5200
Supplies 1500
Rent 900
Insuarance 50
Interest 50
Depreciation 40
(3) Income summary 2860
Retained earnings 2860
(4) Retained earnings 500
Dividends 500
 Income summary
(2) 8800 (2) 8800 (1) 18100
(2) 1300
(2) 3000

(2) 1300
Bal:

(2) 3000
Retained earnings
2500 12000
5000
(2) 50 Bal: 14500
Dividend
1000 (4) 2500
1500
(2) 50 Bal: 2500
(2) 50

18100
Income summary 18100
13100
S&W expenses (2) 8800
Supplies expenses (2) 1300
Rent expenses (2) 3000
5000
Retained earnings 5000
2500
Dividends 2500

18100

a.

Salary and wages expense Income summary

5200 (2) 5200 (2) 5200
(2) 1500
(2) 900
Supplies expense (2) 50
1500 (2) 1500 (2) 50
(2) 40
(3) 2860
Miscellanous expense
900 (2) 900
Retained earnings
0
 (4) 500 (3) 2860
Balance: 2360
Dividend
500 (4) 500

ries wheneverentries
t, correcting they discover an error
may involve any combination of accounts in need of correction.
esult in more entries and postings than a correcting entry, but it will accomplish the desired result
 Income summary Revenue
(2) 5200 (1) 10600 10600 10600
(2) 1500
(2) 900
(2) 50
(2) 50 DEBIT = CREDIT
(2) 40
(3) 2860

Retained earnings
0
(3) 2860
Balance: 2360
Dividend
(4) 500
 Revenue
(1) 14500 9700
8400
Bal: 18100

DEBIT = CREDIT
Income summary Revenue
(1) 10600 10600 10600

DEBIT = CREDIT
 Merchansising company
A. Buyer
Purchase -> Freight cost -> Purchase returns ->
Income expense Income statement (merchandising
Serivce rev Sale revenue
Operating expense Cost of good sold
Rent expense Gross profit (lơik=j nhuận gộp) = 1
S&W expense Operating expense
Advẻtt ex
...

Net income / net loss

Sellers pay for the freight cost

A. Buyer
1. Purchasing
Dr Inventory
 Cr Cash/Account payable

Illustration: On May 4, SS bought goods on account from PW Audio Supply, the price is 3800
Inventory 3800
Account payable 3800

2. Frieght cost
FOB shipping point Buyers pay for freight cost
Debit inventory (freight in)
Credit cash

FOB destination Seller pay for freight cost

No entry

Ilustration: Assume upon delivery of the goods on May 5, SS pays public career company 150 fỏ freight changes, ghe entry on
Debit inventory 150
Credit cash 150
Assume that PW pay for freight cost
no entry

3. Purchase return and allowance

Debit cash/account payable
Credit inventory

Illustration: Assume Sauke Studio returned goods costing 300$ to PW Audio Supply on May 8. The following entry is made by
Debit account pay 300
Credit inventory 300

4. Payment
Credit terms may permit buyer to claim a cash discount for prompt payment

2/10, n/30 1/10 EONM, n/10 EOM

Debit account payable

Credit cash
Credit inventorhyh

Illustration: SS pays the balance due of 3500 (gross invoice of 3800 less purchăse returnss and allowance of 300$) on May 14
Debit Account payable 3500 (do đã thanh toán hết nợ)
cash 3500*98%=3430
Inventory 3500-3430=70 do giá giảm -> giá trị của đơn hàng
 Summary of purchasing Transaction
Inventory
Purchase 3800 300 return
Freight in 150 70 Discount
Bal: 3580

B. Seller
Sell -> Freight cost -> sale return -> payment and allowance
1. Sale
Debit cash/account receivable
Credit sales revenue

Debit cost of goodds sold (COGS)

Credit inventory

Illustration: PW audio Supply record the sale of 3800 on May 4 to SS on account (illustration 5-6). Follows (assume the merch
Debit account rec 3800
Credit sales revenue 3800

Debit COGS 2400

credit inventory 2400

2. Freight cost
FOB shipping point No entry
FOB destination
Dr Freight out/Delivery expense
Credit cash
3. Sales return and allowance
Debit Sales return & allowance
Credit cash / account receivable Không debit trực tiếp vì để so sánh

Debit inventory
Credit COGS
4. Payment
Debit cash
Debit sales discount
Credit account receivable

Illustration: Assume Sauke Stereo pays the balance due of 3500 (gross invoice price of 3800 les purchase returnss and allowan

mÂY 14 cASH 3430=3500*98%

Sales discount 70
 Account receivabl 3500

In the income statement

Revenue
Sales revenue 3800
Less Sales return and allowance 300
Lees Sales discount 70
Net sales 3430

COGS
Gross pròit
Operating expenses
...

P5.2
Apr 2 Inventory 6.2
Account payable 6,200
Apr 4 Account receivable
Sales revenue 5,500
5,500
COGS
Inventory 3,400
3,400
Apr 5 Freight out cash 240
Delivery expense 240
Ap 6 Account payable 500
Inventory 500
Ap 11 account payable 6200-500
Cash 5643
Inventory 57
Ap 13 Cash 5445
Sales discounts 55
Account receivable 5500
Ap 14 Inventory
Cash 3800
3800
16 Cash 500
Inventory 500
18 Inventory 4500
Payable 4500
20 Inventory
Cash
* Cost of goods available for sale (tổng số sản phẩm có thể bán được)
. = begining inventory + purchased goods

COGS nằm trong inncome statement (số hàng đã bán ra)

Ending inventory sẽ là beginning inventory ở đầu kì tới
Company either use perpetual or periodical inventory system
Perpetual ghi nhận COGS trong từng ngày
- Nhược điểm: tốn thời gian, sức lực, chi phí
Periodic sẽ chỉ ghi nhận tài 1 thời điểm duy nhất là cuối tháng

The accounting cycle for a merchandising company (adjusting entry)

Illustration: Suppose that PW Audio Supply has an unadjusted balance of 40500 in inventory. Through a physical count, PW A

Dec 31 COGS 500

iNVENTORY 4500-4000=500

Closing entry
 Vree distribution
Income statement
For the month Endded Apr 30
Sales
Sales revenuee 5500+7400+3400=16300
Less: Sales return and allowance
Less: Sales discount
Net sales
COGS 30 9390
Gross profit
1.
me statement (merchandising company)
12k
7k
profit (lơik=j nhuận gộp) = 12-7=5k
ating expense
Rent expense
S&W expense
Advertising expense
Depreciation expense

Note: chú ý tới inventory và Cost of goods sold

Inventory asset
COGS expense
Freight, Sales discounts, Sales returns là expense
reight changes, ghe entry on SS book

e following entry is made by 5$

lowance of 300$) on May 14, the last day of accounting period. SS make the following entry on May 14 to record the paymênt (2/10,n/30

á giảm -> giá trị của đơn hàng, sản ohẩm cx giảm
g Transaction

. Follows (assume the merchandise cost PW audio supply 2400)

g debit trực tiếp vì để so sánh sales revenue ở từng giai đoạn , để tách bạch lí do, nguyên nhân vì sao sale tăng hoặc giảm

urchase returnss and allowance of 300) on May 14, THE LAST DAY OF DISCOUNTED PERIOD
ough a physical count, PW Audio Supply determines thảt its actual merchandise inventory at December 31 is 40000. The company would
ecord the paymênt (2/10,n/30 term)
ng hoặc giảm
s 40000. The company would make an adjusting entry as follows
1.
April 5 Inventory 25000
Account payable 25000
2.
April 6 Inventory (freight 900
Cash 900
3.
April 7 Equippment 26000
Account payable 26000
4.
April 8 Cash 2600
Inventory 2600
5.
April 15 Account payable 25000-2600=22400
Cash 21952
Inventory 448

Summary of purchasing Transaction

Inventory
Purchase 25000 2600 return
Freight in 900 448 discount
56900
b. Account payable 22400
Cash 22400

Sep 6 Inventory 1800

Cash 1800 Note: COGS d
Sep 9 Inventory 180
Cash (Freight in) 180 Buyer là payable, seller là receivable
Sep 10 Account payable 66
Inventory 66
Sep 12 Account receivabl 924
Sales revenue 924
COGS 28x22=616
Inventory 616
SEP 14 Sales revenue (sal 33
Account payable 33
Inventory 22
COGS 22
Sep 20 Account receivabl40x35= 1400
Sales revenue 1400
COGS 880
 Inventory 880

a.
June 10 Inventory 7600
Account payable 7600
June 11 Inventory 400
Cash (Freight in) 400
June 12 Account payable 300
Inventory 300
June 19 Account payable 7600-300=7300
Cash 7154
Inventory 146
b.
June 10 Account receivabl 7600
Sales revenue 7600
COGS 4300
Inventory 4300
June 12 Sales return 300
Account receivabl 300
Inventory 70
COGS 70
June 19 Cash 7600-300=7300
Sales discount 146
Account receivabl 7154
a. Share capital ordinary

1. Cash in flow reported in the investing section, loss add back in net income section
Cash 10000
Land 12000
Loss on disposal o 2000
2. Cash in flow reported in financing section
Cash 18000
Share capital ordi 18000
3. Depreciation expense added back in the net income
Depriciation expense 14000
Accumulated depreciation 14000
4. Cash out flow reported in the net income section
S&W expense 7000
Cash 7000
5. issuance of ordinary shares for equipment (£9,000) is reported as a non-cash financing and investing activity in a note

Equippment 9000
Share premium or 8000
Share capital ordi 8000
6. Cash in flow reported in investing section, , Gain on disposal deducted in the net income
Cash 3500
Accumulated depr 8000
 Equippment 10000
Gain on disposal o 1500

Cash flow from operating activities

Net income 195000
Adjustment to net income
Depriciation expe 40000
Gain on disposal o -5000
Increase in accoun -15000
Increese in accou 17000
Decrease in prepa 4000
Net cash flow from operating activit 236000

Cash flow from operating activities

Net income 147000
Adjustment to net income
Depriciation expe 21000
Increase in prepa -2000
Decrease in invent 14000
 Increase e in Acco -31000
Increase e in Acc 6000
Decrease in accou -10000
Net cash flow from operating activit 145000

Cash flow from operating activities

Net income 67000
Adjustment to net income
Depriciation expe 21000
Increase in prepa -2000
Decrease in invent 14000
Increase e in Acco -31000
Increase e in Acc 6000
Decrease in accou -10000
Net cash flow from operating activit 65000
Cash flow from Investing activities
Purchase equippm -70000
Cost of equippmen -53000
Sales from plant assets
1. Subtract 250000 from inventory
2. No entry
3.
a. Fifo
Beginning inventory=135000
Ending inventory=2760+3000=5760
COGS=Beginning + purchase - ending = 129240
r là payable, seller là receivable
d investing activity in a note
Các nguyên tắc tính COGS
1. Specific identification

2. Cost assumption: FIFO and AVCO

2.1 FIFO 2.2 AVCO
First -in, First - out Average - Cost

Periodic system: Beginning inventories + Purchases) - Ending inventories = COGS

Illustration

FIFO AVCO
55 = 10 (100) + 20 (110) + 25(120) Average cogs = 120 x 55 = 6600
-> COGS = 10x100 + 20x110 + 25x120 = 6200 -> Ending Inventory =
-> iNVENTORY = 120000-6200=5800

Step 1: Ending inventory

Financial statements and tax effect
FIFO AVCO
COGS lower higher
Net income higher lower
Ending inventory higher lower
FIIFO providé Ending inventory value which closer to current cost
Tax expense higheer lower
Classification of cash flow
financial activities -> non current equity and liability (von chu so huu)
investing activities -> invest in non-current asset
Operating activities
Non - cash activities
Format of rhe statement of cash flows
order
1.. operating acctivities
2. investing activities Direct method
3. Financing activities Indirect method

Indirect khac o phan operating

Chỉ học về indirect
-> tính net cash = net income +- ...
1. Financing activities
Cash in 80000000
2. financing

i. operating
1. Net income from income statement
2. Add back non cash expense
depreciation thường gặp
amortisation khấu hao tài sản vô hình
depletion khấu hao tài sản tự nhiên (quặng, khoáng)
3. Deduct gain/add loss on sale of NCA's (non-current asset)
- gain on disposal (do dúng ra phải đi vào investing)
plus loss on disposal
4. Adjust changes: current assets and current liabilities
Trừ nếu tăng account rec -> do netincome đang > net cash
cộng nếu giảm account
Ex 14.3
1.
Cash 10000
Land 12000
suffocated
Bonds, shares của cty sẽ là financing , của cty khác là investing
E3.4 (tr155/859)
1 Unearned reve
2 Accrued expense
3 Accrued expense
4 Accrued rev
5 prepaid exp
6 Unearned rev
7
8
9
10
11

E3.4 (tr155/859)
1 Interest Expense
Interest payable