Accounting 211
Financial and Managerial
Accounting
Teaching Assistant
Hyun Jung (Joan) Lee
Contents
1. Introduction
2. Review of Chapter2
3. Review of Chapter3
4. Practice
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Spring , 2008
Introduction
1
Recitation Materials
Personal Blog : www.personal.psu.edu/hul152
Click on “ACCTG 211 Spring 2008”
“Student Information Form”  Bring it next Friday!!!!
Office : 381A Business Building, 814-863-3796
Office Hour : 8 AM. ~ 10:00 AM on Tuesday
Email : hul152@psu.edu
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Spring , 2008
WileyPlus
Online Homework
Due Date : “Next Monday 6 PM.”
Problem : Chapter3-P3, P4, and P-5
For Registering
http://www.wiley.com/college/twomin/stu/register.html
The URL : http://edugen.wiley.com/edugen/class/cls49425/
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Review of Chapter2
2
Financial Statements
Overview
Complete Set of Financial Statement
Income Statement
Statement of Changes in Owners’ Equity
Balance Sheet
Statement of Cash Flow
Notes to the financial Statements
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Elements of Financial Statements
Next to each item, indicate whether it is an Asset,
Liability, Equity, Revenue or Expense.
_____Cash
_____ Common Stock ($1 par)
_____ Depreciation Expense
_____ Insurance Expense
_____ Interest Receivable
_____ Interest Earned
_____ Investment in U.S. Bonds
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Elements of Financial Statements, conti.
Next to each item, indicate whether it is an Asset,
Liability, Equity, Revenue or Expense.
_____Cash
Asset
_____ Common Stock ($1 par)
Equity
_____ Depreciation Expense
Expense
_____ Insurance Expense
Expense
_____ Interest Receivable
Asset
_____ Interest Earned
Revenue
_____ Investment in U.S. Bonds Asset
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More elements of financial statements
More Elements
_____Miscellaneous Expense
_____ Prepaid Insurance
_____ Rent Revenue
_____ Retained Earnings
_____ Salaries Expense
_____ Salaries Payable
_____ Service Revenue
_____ Supplies Used
_____ Unearned Rent
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More elements of financial statements, conti.
More Elements
_____Miscellaneous Expense
_____ Prepaid Insurance
_____ Rent Revenue
_____ Retained Earnings
_____ Salaries Expense
_____ Salaries Payable
_____ Service Revenue
_____ Supplies Used
_____ Unearned Rent
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Expense
Asset
Revenue
Equity
Expense
Liability
Revenue
Expense
Liability
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Equations
Overview
Accounting Equation
Assets = Liabilities + Owner’s Equity
Cost of the Items used in Running a Business = Where the Funds to
Buy those items came from, either creditors or the owners
Retained Earning Equation
End of R/E = Beginning R/E + Net Income – Dividends
Statement of changes in Owners’ Equity
End of Contributed Capital (C/C) + End of Retained Earnings
End of C/C = Beginning of C/C + Stock Issued during that period
End of R/E = Beginning R/E + Net Income – Dividends
Financial Ratio  Please see the summary table in 1st
Recitation Material!!~
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Review of Chapter3
3
THE ACCOUNTING CYCLE
Transactions occur
Record at JOURNAL ENTRY
Posted to the GENERAL LEDGER.
ADJUSTING ENTRIES are made and posted.
Trial balance
A list of each account and its debit or credit balance
Prepared any time
Catch errors with the debit-credit part of the accounting system
Usually before and then again after adjustments
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THE ACCOUNTING CYCLE, conti
Financial statements are prepared.
Closing journal entries are recorded and posted
A post-closing trial balance may be prepared
The Goal of the Whole Process
Financial Statements that accurately reflect the financial condition
and transactions of the company
Communicating Information to Users
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Journal Entries
“Journal Entry” is the recording of the economic effects
of a particular transaction.
Debits on the LEFT!!
Credits on the RIGHT!!
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How this Debit/Credit Stuff Works
Increases in assets go on the LEFT DEBIT
Assets
=
Liabilities
+ Owners’ Equity
+ Revenue
Expense
•Debits increase
ASSETS
•Credits decrease
ASSETS
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How this Debit/Credit Stuff Works, conti
Increases in liabilities go on the RIGHT CREDIT
Increases in equity go on the RIGHT CREDIT
Assets
+
-
=
Liabilities
-
+
+ Owners’ Equity
Revenue
+
Expense
•Credits increase
Liabilities/Equity
•Debits decrease
Liabilities/Equity
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Revenue and Expense Accounts
They are called income statement accounts, or
temporary or nominal accounts.
Assets
+
-
=
Liabilities
-
+
+ Owners’ Equity
-
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+
Revenue
Expense
- +
+ -
Spring , 2008
Practice!!!
4
Practice A
Problem 1
Problem 4
Problem 6
1st Homework
Due Date : “Next Monday 6 PM.”
Problem : Chapter3-P3, P4, and P-5
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Spring , 2008
Do you have any questions?
381A Business Building
814-863-3796, hul152@psu.edu
Welcome to Accounting World!!~
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Spring , 2008