1. Cost Accounting Cycle Pdf
2. Cost Accounting De Leon 2019 Answer Key Chapter 3
3. Cost Accounting De Leon Solution Manual 2016 Chapter 3

What is a Journal Entry?are the first step in the accounting cycle and are used to record all and events in the accounting system. As business events occur throughout the accounting period, journal entries are recorded in the general journal to show how the event changed in the accounting equation. For example, when the company spends cash to purchase a new vehicle, the cash account is decreased or credited and the vehicle account is increased or debited.How to Make a Journal EntryHere are the steps to making an accounting journal entry. Identify TransactionsThere are generally three steps to making a journal entry.

First, the business transaction has to be identified. Obviously, if you don’t know a transaction occurred, you can’t record one. Using our vehicle example above, you must identify what transaction took place. In this case, the company purchased a vehicle. This means a new asset must be added to the accounting equation.2. Analyze TransactionsAfter an event is identified to have an economic impact on the accounting equation, the business event must be analyzed to see how the transaction changed the accounting equation.

Cost Accounting Cycle Pdf

When the company purchased the vehicle, it spent cash and received a vehicle. Both of these accounts are asset accounts, so the overall accounting equation didn’t change. Total assets increased and decreased by the same amount, but an economic transaction still took place because the cash was essentially transferred into a vehicle. Journalizing TransactionsAfter the business event is identified and analyzed, it can be recorded. Journal entries use debits and credits to record the changes of the accounting equation in the general journal. Traditional journal entry format dictates that debited accounts are listed before credited accounts.

Each journal entry is also accompanied by the transaction date, title, and description of the event. Here is an example of how the vehicle purchase would be recorded.Since there are so many different types of business transactions, accountants usually categorize them and record them in separate journal to help keep track of business events. For instance, cash was used to purchase this vehicle, so this transaction would most likely be recorded in the cash disbursements journal. There are numerous other journals like the sales journal, purchases journal, and accounts receivable journal.ExampleWe are following Paul around for the first year as he starts his guitar store called Paul’s Guitar Shop, Inc. Here are the events that take place.Entry #1 — Paul forms the corporation by purchasing 10,000 shares of $1 par stock.Entry #2 — Paul finds a nice retail storefront in the local mall and signs a lease for $500 a month.Entry #3 — PGS takes out a bank loan to renovate the new store location for $100,000 and agrees to pay $1,000 a month.

Cost Accounting De Leon 2019 Answer Key Chapter 3

He spends all of the money on improving and updating the store’s fixtures and looks.Entry #4 — PGS purchases $50,000 worth of inventory to sell to customers on account with its vendors. He agrees to pay $1,000 a month.Entry #5 — PGS’s first rent payment is due.Entry #6 — PGS has a grand opening and makes it first sale. It sells a guitar for $500 that cost $100.Entry #7 — PGS sells another guitar to a customer on account for $300. The cost of this guitar was $100.Entry #8 — PGS pays electric bill for $200.Entry #9 — PGS purchases supplies to use around the store.Entry #10 — Paul is getting so busy that he decides to hire an employee for $500 a week.

Financial Accounting CycleThe accounting cycle is a series of steps setting out the procedures required for a typical small business to collect, record, and process its financial information.The accounting cycle will vary from business to business and the procedures involved may change, for example, the accounting cycle for a service business might differ from the accounting cycle of a manufacturing business, the but the general steps to explain the accounting cycle remain the same.The accounting cycle has ten basic steps, which can be seen in the illustration shown below. A PDF version of this diagram is available at the bottom of the page.Flow Chart of Accounting CycleTo explain the accounting cycle we have set out the ten steps involved in the flow chart diagram below. The Complete Accounting Cycle Step 1→Step 2Identify and analyze transactionsJournal entries for transactions↑↓Step 10Step 3Post closing trial balancePost journals to ledgers↑↓Step 9Step 4Closing entriesPrepare an unadjusted trial balance↑↓Step 8Step 5Prepare financial statementsPrepare worksheet↑↓Step 7←Step 6Adjusted trial balanceRecord adjusting journal entriesSteps in Accounting Cycle Step 1: Identify and Analyze TransactionsThe accounting cycle starts by identifying the transactions which relate to the business. The business is a separate entity to the owner, so only business transactions should be included.Having identified the transactions, each one now needs to be analyzed to determine which accounts in the bookkeeping records are affected. Each transaction must be supported by a relevant accounting source document such as sales and purchases invoices, debit and credit notes, petty cash vouchers, payroll reports etc. Step 2: Journal Entries for TransactionsThe journal entries are recorded in a sometimes referred to as a daybook.The journals are also known as the books of original entry as they are the first time the transactions are recorded and entered into the accounting system.

Step 3: Post journals to ledgersThe journals are used to post to the (sometimes referred to as the book of final entry). The general ledger has an account for each type of transaction e.g. Rent expense, accounts receivable control, fixed assets etc. The general ledger is sometimes divided into the nominal ledger for income and expenses, and the private ledger for assets and liabilities.All postings to the ledgers are double entry postings and therefore must balance which every debit having an equal and opposite credit entry.

Step 4: Prepare an unadjusted trial balanceAt the end of each accounting period, the balances on the accounts of the general ledger are listed to produce a. At this stage the total debits on the trial balance should equal the total credits.This unadjusted trial balance is used solely to check the total of the debit and credit entries, to ensure the accounting records balance and that the arithmetic is correct. If the trial balance does not balance correcting entries should be made in the ledgers until it does. Step 5: Prepare worksheetA 10 column is prepared and the unadjusted trial balance is transferred to the first two columns. Step 6: Record adjusting journal entriessuch as accruals, prepayments, and depreciation entries are prepared to ensure that income and expenditure is allocated to the correct accounting period, this means that the accounting records are completed on an accruals basis and are in compliance with the matching principle.The adjusting entries are entered in the next two columns of the worksheet and at this stage, are not entered into the accounting records.

Step 7: Adjusted trial balanceWhen all adjusting entries have been completed an adjusted trial balance is prepared in the next two columns of the worksheet. Step 8: Prepare financial statementsThe financial statements can now be prepared from the adjusted trial balance.

Dvdrip movies. Items relating to the income statement are transferred to the next two columns and items relating to the balance sheet are transferred to the final two columns. Step 9: Closing entriesare carried out in the accounting ledgers. Closing entries are posted and temporary income and expenditure accounts are closed and their balances transferred to an income and expenditure summary account.The summary account is in turn closed to transfer the profit or loss for the period to the balance sheet retained profits account. Balance sheet or permanent accounts are not closed, but the balance is carried forward to the next accounting period.

Cost Accounting De Leon Solution Manual 2016 Chapter 3

Step 10: Post closing trial balanceA is drawn up to ensure that the debits and credits balance for the start of the new accounting period.The post closing trial balance is a list of balances after the closing entries have been made. At this stage the temporary income and expenditure accounts have been closed and set to zero, so only the balance sheet accounts are listed on the post closing trial balance. The accounting cycle starts again with the new opening balance sheet account balances.The accounting cycle diagram is available for download in PDF format by following the link below.