This is the prescribed textbook for your course.

This is the prescribed textbook for your course. Available NOW at your campus bookstore!  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

BALANCE DAY ADJUSTMENTS LEARNING OUTCOME: TO REVISE GENERAL JOURNAL ENTRIES FOR BALANCE DAY ADJUSTMENTS  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

accrued expenses accrued revenue balance date balance day adjustments balance day entries prepaid expenses revenue in advance KEY TERMS  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

THE ACCRUAL CONCEPT • Assumes that transactions are recorded in the period when revenue is earned and expenses are incurred NOT • When the cash is received and expenses are paid  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

Accrued revenue Accrued expenses Revenue in advance Prepaid expenses Revenue earned but not yet received Expenses incurred but not yet paid Revenue received but not yet earned Expenses paid but not yet incurred TYPES OF BALANCE DAY ADJUSTMENTS  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

Accrued revenue Prepaid expenses Revenue in advance Accrued expenses TYPES OF BALANCE DAY ACCOUNTS Asset account (DEBIT) Liability account (CREDIT)  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

EXAMPLE • Accrued revenue • Commission is due to be paid in July on a property sold in June  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

EXAMPLE • Prepaid expenses • Insurance expense account includes an amount of $3000 which relates to July, August and September in the next financial year  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

EXAMPLE • Accrued expenses • Wages to be paid in July include $1000 for employees who worked on 29 June.  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

EXAMPLE • Revenue received in advance • Fees received in June included a deposit of $2000 for a project starting in August  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

BALANCE DAY ADJUSTMENTS AFFECT STATEMENT OF FINANCIAL POSITION  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

OTHER BALANCE DAY ENTRIES • Closing inventories • Bad and doubtful debts • Depreciation • Provision for annual leave • Provision for long service leave  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications forFinancial Accounting by David Willis, slides prepared by Kaye Watson

This is the prescribed textbook for your course.