Automated Accounting

Analyzing Transactions
Automated Accounting
Analyzing Transactions II
Posting
Adjusting/Closing Entries
Journ. Sales/Cash Receipts
Payroll Records
Work Sheet II
Sales/Cash Receipts
Plant Assets
Recording Adj/Closing Entries
Notes and Interest
Federal Taxes
Wisconsin Taxes
Cash Control/Banking
Automated Accting - G
Automated Accting - SW
Inventory
Uncollectible Accounts
Purchases/Cash Pymts
Financial Statements II
Payroll Accounting
Posting II
Journ Purch./Cash Pay.
Financial Statements
Work Sheet
Journalizing
Analyzing Transactions

Lynda Curler - Ch.9

Chapter 9 Objectives:

Upon completion of chapter 9, each student should be able to:

1. Define the accounting terms related to adjusting and closing entries for a service business organized as a proprietorship.

2. Identify accounting concepts and practices related to adjusting and closing entries for a service business organized as a proprietorship.

3. Record adjusting entries for a service business organized as a proprietorship.

4. Record closing entries for a service business organized as a proprietorship.

5. Prepare a post-closing trial balance for a service business organized as a proprietorship.

Accounting One - Five Day Lesson Plan

Chapter Nine - Recording Adjusting & Closing Entries

Lynda Curler February 22, 2000

Chapter 9 - Day 1

Materials Needed:

§ Chalk, markers, eraser, seating charts, grade book, teaching text, attendance sheets/class roster, pens, pencils, felt tip pens, damp cloth, chapter file of lesson plans, transparencies for 9-1 & 9-2 Work Together and On You Own problems, transaction analysis and blank transparencies, transaction analysis handout and flashcards.

Objectives:

1. Introduce chapter on recording adjusting and closing entries for a service business and objectives of the chapter.

2. Define terms associated with recording adjusting and closing entries, including adjusting entries, permanent accounts, temporary accounts, closing entries, post-closing trial balance, and accounting cycle.

3. Record adjusting entries for a service business organized as a proprietorship.

Procedures:

1. Greet students and take attendance:

Good morning/afternoon. It's good to see everyone again. Let's get started by quickly taking attendance so we can begin discussing chapter 9.

2. Introduce Chapter:

Please open your books to page 198 so we can review the terms that we need to be familiar with. We have used some of the terms in previous chapters, such as temporary accounts, permanent accounts, and the accounting cycle. But adjusting and closing entries are new, as well as the post-closing trial balance.

Define terms with students.

3. Preview chapter objectives:

When we complete this chapter, each of you should be able to:

6. Define the accounting terms related to adjusting and closing entries for a service business organized as a proprietorship.

7. Identify accounting concepts and practices related to adjusting and closing entries for a service business organized as a proprietorship.

8. Record adjusting entries for a service business organized as a proprietorship.

9. Record closing entries for a service business organized as a proprietorship.

10. Prepare a post-closing trial balance for a service business organized as a proprietorship.

4. Explain the "why" of adjusting entries:

Last week we learned how to prepare worksheets and financial statements, these will tie into our adjusting entries because that is where we get the information for our entries. So we have already done the hard part of analyzing and planning the adjustments, now we just have to do the proper recording of the adjustments. The reason we make adjusting entries is to record in a journal and post to the ledger the adjustment data from the worksheet in order for the account balances to be updated.

5. Review Worksheet & Make Adjusting Entries from Work Together problem on page 202:

View transparency on overhead. Point out adjustments on worksheet and make adjusting entries to journal on transparency, complete general ledgers (use 4-step procedure).

6. Seat Work:

Have students complete adjusting entries for On Your Own problem on page 202 using working papers. Check solutions for accuracy and understanding.

7. Contingency Plan:

Use flash cards to review terms and concepts.

8. Assignment (2 minutes):

Your assignment for tomorrow will be to complete application problem 9-1 on page 217, which involves journalizing and posting adjusting entries.

Have a great day!

9. Evaluation:

Evaluate time allotted: ________________________________________________________________________________________________________________________________________________________________

What would I change: ________________________________________________________________________________________________________________________________________________________________

What would I leave the same: ________________________________________________________________________________________________________________________________________________________________

Additional Notes: __________________________________________________________________

_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Chapter 9 - Day 2

Materials Needed:

§ Chalk, markers, eraser, seating charts, grade book, text, attendance sheets/class roster, pens, pencils, felt tip pens, damp cloth, chapter file of lesson plans, transparencies for 9-1 & 9-2 Work Together and On Your Own problems, transparencies for 9-1 & 9-2 Application Problems, transaction analysis and blank transparencies.

Objectives:

1. Wrap up adjusting entries.

2. Define accounting terms related to closing entries for a service business organized as a proprietorship.

3. Identify accounting concepts and practices related to closing entries for a service business organized as a proprietorship.

4. Record closing entries for a service business organized as a proprietorship.

Procedures:

1. Greet students and take attendance.

2. Homework Review:

View transparency of homework and have students make necessary corrections. Clarify students' understanding of adjusting entries by reviewing why adjusting entries are made.

3. Closing Entries:

Begin closing entries by explaining the need for and the difference between permanent and temporary accounts using the information on page 203.

4. Explain and demonstrate the following using examples and transparencies:

· Need for closing temporary accounts, page 203. Review temporary & permanent accounts.

· Need for income summary account, page 204.

· Closing entry for an income statement account with a credit balance, page 205. Use T accts.

· Closing entry for income statement accounts with debit balances, page 206. Use T accts.

· Closing entry to record net income or loss and close the income summary account, page 207. Use T accts.

· Closing entry for owner's drawing account, page 208. Use T accts.

5. Seat Work:

Have students continue the Work Together lesson, continued on page 209, to journalize and post closing entries. Check solutions for accuracy and understanding.

6. Contingency Plan:

Have students write for five minutes about closing entries and then have some share their responses with the class.

7. Assignment:

You are to complete the On Your Own problem on page 209 for tomorrow, which is journalizing and posting closing entries. Remember that the problem is continued from the work done on page 202 for adjusting entries.

We will work on Application Problem 9-2 in class tomorrow.

See you tomorrow!

8. Evaluation:

Evaluate time allotted: ________________________________________________________________________________________________________________________________________________________________

What would I change: _________________________________________________________________________________________________________________________________________________________________________________________________________

What would I leave the same: _________________________________________________________________________________________________________________________________________________________________________________________________________

Additional Notes: __________________________________________________________________

Chapter 9 - Day 3

Materials Needed:

§ Chalk, markers, eraser, seating charts, grade book, text, attendance sheets/class roster, pens, pencils, felt tip pens, damp cloth, chapter file of lesson plans, transparencies for 9-3 Work Together & On Your Own problems, transparencies for 9-1 & 9-2 Application Problems, transaction analysis and blank transparencies.

Objectives:

1. Complete application problem 9-2 and section on journalizing and posting closing entries.

2. Define accounting terms related to adjusting and closing entries for a service business organized as a proprietorship.

3. Identify accounting concepts and practices related to adjusting and closing entries for a service business organized as a proprietorship.

4. Prepare a post-closing trial balance for a service business organized as a proprietorship.

Procedures:

1. Greet students and take attendance.

2. Homework Review:

Review journalizing and posting closing entries from the On Your Own problem on page 209. Check solutions for accuracy and understanding.

3. In-class Work:

Have students complete application problem 9-2 on page217 using the journal and general ledger accounts from application problem 9-1.

Circulate, observe student work, and answer questions.

4. Wrap up closing entries:

Discuss closing entries by reviewing permanent accounts, temporary accounts, and the four closing entries.

5. Explain and demonstrate the following using transparencies and examples:

· General ledger accounts after adjusting and closing entries are posted, pages 210-212.

· Preparing a post-closing trial balance, page 213.

· The accounting cycle for a service business, page 214.

6. Seat Work:

Continue the Work Together lesson from page 209 by having the students prepare a post-closing trial balance. Work along with the students, answer questions, and review work for accuracy.

7. Contingency Plan:

Complete On Your Own problem on page 209 to reinforce the post-closing trial balance.

8. Assignment:

Complete Mastery Problem 9-4 on page 218 for tomorrow. Explain that the problem will take a little longer because it involves journalizing and posting adjusting and closing entries, as well as preparing a post-closing trial balance.

9. Evaluation:

Evaluate time allotted: _________________________________________________________________________________________________________________________________________________________________________________________________________

Additional Notes: __________________________________________________________________

Chapter 9 - Day 4

Materials Needed:

§ Chalk, markers, eraser, seating charts, grade book, text, attendance sheets/class roster, pens, pencils, felt tip pens, damp cloth, chapter file of lesson plans, transparencies for 9-4 Mastery Problem, transparencies for Study Guide 9, and all other transparencies used for this chapter, and blank transparencies.

Objectives:

1. Review assigned homework.

2. Summarize chapter and review entries presented in the chapter.

3. Complete and review Study Guide 9.

4. Internet activity for chapter 9.

Procedures:

1. Greet students and take attendance.

2. Homework Review:

With a partner, have students review the work they completed for the Mastery Problem. Circulate, check progress and work, and answer questions.

Use transparency to show the correct answers and how the entries should appear.

3. Chapter Review:

Use the transparencies used throughout the chapter to review adjusting and closing entries, and preparing a post-closing trial balance.

4. Study Guide:

Split class into groups to work on the chapter 9 study guide to use as a review for the test.

Use study guide to assess problem areas and clarify points that require it.

5. Contingency Plan:

If required, use class time to work on Challenge Problem 9-5 on page 219.

If students have a firm understanding and grasp of the chapter, spend time working on the Internet activity for the chapter.

6. Homework Assignment:

Use the lessons and problems from class and homework to study for tomorrow's test. If the Challenge Problem has not been completed, it is an excellent review for bringing all of the chapter concepts together.

Also, bring all homework assignments and the Internet activity to class tomorrow to hand in for recording.

Study hard!

7. Evaluation:

Additional Notes: __________________________________________________________________

Chapter 9 - Day 5

Materials Needed:

§ Chalk, markers, eraser, seating charts, grade book, text, attendance sheets/class roster, pens, pencils, felt tip pens, damp cloth, chapter file of lesson plans, all transparencies used for this chapter, and chapter 9 test.

Objectives:

1. Complete chapter test.

2. Review Internet activity.

Procedures:

1. Greet students and take attendance.

2. Answer any questions and address areas of concern.

3. Administer Test:

Pass out tests and give thorough instructions on completing each section.

Give students 40 minutes to complete the test, unless special arrangements have been made to allow certain students more time.

Advise students to turn their tests over and remain at their desks until everyone finishes. Begin reading chapter 10 is they finish ahead of time.

Collect tests.

4. Internet Activity:

Have students share what they learned about PricewaterhouseCoopers web site with regard to the questions asked for chapter 9.

Collect chapter homework papers and Internet activity.

5. Assignment:

Start reading chapter 10 for Monday and be prepared to discuss the difference between a service business organized as a sole proprietorship and a merchandising business.

Have a wonderful weekend!

6. Evaluation:

Additional Notes: __________________________________________________________________

Chapter Nine

Adjusting Entries:

Adjusting entry for Supplies:

____________ ____________

Adjusting entry for Prepaid Insurance:

_____________ ____________

Closing Entries:

Closing entry for income statement account with a credit balance (Sales):

____________ ____________

Closing entry for income statement accounts with a debit balance (Expense Accounts):

___________ ____________

Closing entry for Income Summary with a net income:

___________ ____________

Closing entry for Income Summary with a net loss:

___________ ____________

Closing Entries cont.

Closing entry for owner's drawing account:

___________ ____________

Permanent Accounts:

Temporary Accounts:

Post-closing Trial Balance:

Account Analysis

Adjusting entry for Supplies:

____________ ____________

Adjusting entry for Prepaid Insurance:

_____________ ____________

Closing entry for income statement account with a credit balance

(Sales):

____________ ____________

Closing entry for income statement accounts with a debit balance (Expense Accounts):

___________ ____________

Closing entry for Income Summary with a net income:

___________ ____________

Closing entry for Income Summary with a net loss:

___________ ____________

Closing entry for owner's drawing account:

___________ ____________

Five Day Lesson Plan

Chapter Nine

Recording Adjusting & Closing Entries

Prepared for

Dr. Harriet Rogers

Methods of Teaching Accounting

437-441

University of Wisconsin

Whitewater, WI

Prepared by

Lynda K. Curler

February 22, 2000

Permanent Accounts:

· Accounts used to accumulate information from 1 fiscal period to the next.

· Examples - owner's capital account, assets, liabilities

· Ending balances for 1 fiscal period are beginning balances for next.

Temporary Accounts:

· Accounts used to accumulate information until it is transferred to owner's capital account.

· Examples - revenue, expense, owner's drawing, income summary

· Show changes in owner's capital for a single fiscal period

· Begin new fiscal year with zero balance

Income Summary Account:

· Temporary account

· Used to summarize closing entries for revenue and expense accounts

· Does not have a normal balance side

· Examples: if revenue > total expenses = net income (Inc. Sum. = Cr. Bal)

If total expenses > revenue = net loss (Inc. Sum. = Db. Bal)

· Closed at end of fiscal period

Adjusting Entries:

· Journal entries recorded to update general ledger accounts at end of a fiscal period. Update all account balances.

· Examples: Supplies - supplies exp. Db.

Supplies Cr.

Prepaid insur. - insur. Exp. Db.

Prepaid inc. Cr.

Questions:

· Why are adjustments journalized? To update general ledger accounts.

· Where do you get the information to journalize adjusting entries? Adjustments column of worksheet.

· What accounts are increased from zero balances after adjusting entries for supplies and prepaid insurance are journalized and posted? Supplies & insurance expense.

Closing Entries:

· Journal entries used to prepare temporary accounts for a new fiscal period.

· Four types of closing entries:

· Income Statement Accts.: Sales Db.

Inc. Sum. Cr.

Inc. Sum. Db.

Expenses Cr.

· Record Net Income/Loss & Close Inc. Sum. Acct.

Net Income: Inc. Sum. Db.

Capital Cr.

Net Loss: Capital Db.

Inc. Sum. Cr.

· Owner's Drawing Acct.: Capital Db.

Drawing Cr.

Questions:

· Where do you get the information for closing entries? Income statement and balance sheet columns of the worksheet.

· What do ending balances of permanent accounts for one fiscal period represent at beginning of next fiscal period? Beginning balances.

· What do balances of temporary accounts show? Changes in owner's capital for a single fiscal period.

· What are the 4 closing entries?

· Entry to close income statement accts. w/credit balances

· Entry to close income statement accts. w/debit balances

· Entry to record net income or net loss and close income summary account

· Entry to close owner's drawing account

Post-Closing Trial Balance:

· Trial balance prepared after the closing entries are posted.

Questions:

· Why are lines drawn in both the Balance Debit and Balance Credit columns when an account has a zero balance? To assure reader that a balance has not been omitted.

· Which accounts go on the post-closing trial balance? Only those w/balances (permanent accts.).

· Why are temporary accounts omitted from post-closing trial balance? Because they are closed and have zero balances.

Introduce chapter

Define accounts

Introduce adjusting entries: define

Show on worksheet

Journalize

Account analysis

Introduce closing entries: define

types

Show on worksheet

Journalize

Account analysis

Post to general ledgers

Post closing trial balance from page 210