,单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,*,Chapter 8,Adjusting Entries and Work Sheet,for a Merchandising Sole Proprietorship,Adjusting Entries A Closer Look,The accounting cycle is a sequence of accounting procedures which are repeated continuously during each accounting period.,In this chapter,we will discuss the adjustments for supplies,merchandise inventory,and unearned revenue,Adjustment for Supplies,These items are usually recorded under an asset account called,Office Supplies,because they are used up in a relatively short period of time.,Such as:pencils and pens,ink,typewriter ribbons,memo pads,etc.,Adjustment for Supplies:in accounting Practice,When we buy office supplies,we just debit the Office Supplies account and credit the Cash or Accounts Payable account.,At the end of a month,we take a physical count of the amount of supplies on hand to determine the cost of supplies that are used up during the month.,Adjustment for Supplies:in accounting Practice,Dec 1,200X,Dec 31,200X,Adjustment for Merchandise Inventory,Perpetual Inventory System,Any purchases or sales of merchandise are recorded daily directly in the Merchandise Inventory account.When merchandise is acquired,its cost is debited to the Merchandise Inventory account;when merchandise is sold,its cost is credited to the Merchandise Inventory account.As a result,the accounting records show the running total amount of inventory on hand,Periodic Inventory System,A merchandising business maintains a separate Purchases account.Any purchases of merchandise are recorded by debiting the Purchases account.The Merchandise Inventory account is updated by making an adjusting entry only at the end of the accounting period when an actual physical count of the goods in stock is taken.,Adjustment for Merchandise Inventory,Step 1,Close the Merchandise Inventory account into the Income Summary account.,Adjustment for Merchandise Inventory,Step 2,Enter the amount of the ending inventory by debiting the Merchandise Inventory account and crediting the Income Summary account.,Adjustment for Unearned Revenue,If the amounts collected in advance will not be earned during the current accounting period,we record them by debiting the Cash account and crediting another account called,Unearned Revenue,.,The Unearned Revenue account is regarded as a liability account.,Adjustment for Unearned Revenue,Dec,1,200X,Dec 31,200X,Completing the Work Sheet,Completing the Work Sheet,T accounts for adjustments,Basic steps in completing a work sheet,Complete the Trial Balance columns,and total of the Debit and Credit columns.,Enter the adjustments in the Adjustments columns,and total the two columns.,Complete the Adjusted Trial Balance columns,and total the two columns.,Complete the Income Statement and Balance Sheet columns by recording the adjusted balances of each account.,(,Note the placement of the special accounts for a merchandising business in these two sections of the work sheet,.),Journalizing and Posting the Adjusting Entries,Adjusting Entries,Dec.31Income Summary200 000,Merchandise Inventory200 000,Merchandise Inventory250 000,Income Summary250 000,31Unearned Sales10 000,Sales 10 000,31Office Supplies Expense 1 000,Office Supplies1 000,31Insurance Expense 150,Prepaid Insurance 150,31 Depreciation Expense:Store Equipment600,Accumulated Depreciation:Store Equipment 600,31 Depreciation Expense:Building1 000,Accumulated Depreciation Expense:Building1 000,