2. Using a trial balance to prepare financial statements
【Key points & Difficult points】
Key points：Explain and apply double entry accounting
Journalize and post transactions Prepare trial balance and explain its role
Difficult points： Explain and apply double entry accounting
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Chapter 3 Adjusting Accounts and Preparing Financial Statements
【Objectives】
In this chapter, you will learn the following conceptual objectives:
C1: Explain the importance of periodic reporting and the time period principle C2: Explain accrual accounting and how it improves financial statements C3: Identify the types of adjustments and their purpose
In this chapter, you will learn the following analytical objectives: A1: Explain how accounting adjustments link to financial statements In this chapter, you will learn the following procedural objectives: P1: Prepare and explain adjusting entries P2: Explain and prepare an adjusted trial balance
P3: Prepare financial statements from an adjusted trial balance
【Contents】
A. Timing and Reporting
1. The accounting period 2. Accrual basis versus cash basis 3. Recognizing revenues and expenses
B. Adjusting Accounts
1. Framework for adjustments 2. Prepaid expenses 3. Unearned revenues 4. Accrued expense 5. Accrued revenues
6. Links to financial statements 7. Adjusted trial balance
C. Preparing Financial Statements
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【Key points & Difficult points】
Key points：Explain links between accrual accounting and adjusting entries
Prepare and explain adjusting entries
Explain impacts of adjusting on financial statements
Difficult points：Prepare and explain adjusting entries
Explain impacts of adjusting on financial statements
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Chapter 4 Completing the Accounting Cycle
【Objectives】
In this chapter, you will learn the following conceptual objectives: C1: Explain why temporary accounts are closed each period C2: Identify steps in the accounting cycle C3: Explain and prepare a classified balance sheet
In this chapter, you will learn the following procedural objectives: P1: Prepare a worksheet and explain its usefulness P2: Describe and prepare closing entries
P3: Explain and prepare a post-closing trial balance 【Contents】 A. Work Sheet as a Tool 1. Benefit of a work sheet 2. Uses of a work sheet
3. Work sheet applications and analysis B. Closing Process
1. Temporary and permanent accounts 2. Recording closing entries 3. Post-closing trial balance C. Classified Balance Sheet 1. Classification structure 2. Classification categories
【Key points & Difficult points】
Key points：Explain why temporary accounts are closed each period
Identify steps in the accounting cycle Describe and prepare closing entries Explain and prepare a classified balance sheet
Difficult points：Explain why temporary accounts are closed each period
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Chapter 5 Accounting for Merchandising Operations
【Objectives】
In this chapter, you will learn the following conceptual objectives:
C1: Describe merchandising activities and identify income components for a merchandising company
C2: Identify and explain the inventory asset of a merchandising company C3: Describe both perpetual and periodic inventory systems
C4: Analyze and interpret cost flows and operating activities of a merchandising company In this chapter, you will learn the following procedural objectives:
P1: Analyze and record transactions for merchandise purchases using a perpetual system P2: Analyze and record transactions for merchandise sales using a perpetual system P3: Prepare adjustments and close accounts for a merchandising company P4: Define and prepare multiple-step and single-step income statements
P5: Appendix 5A: Record and compare merchandising transactions using both periodic and perpetual inventory systems
【Contents】
A. Merchandising Activities
1. Reporting income for a merchandiser 2. Reporting inventory for a merchandiser 3. Operating cycle for a merchandiser
B. Accounting for Merchandise Purchases
1. Trade discounts 2. Purchase discounts
3. Purchase returns and allowances
4. Transportation costs and ownership transfer
C. Accounting for Merchandise Sales
1. Sales of merchandise
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