Académique Documents
Professionnel Documents
Culture Documents
1.
Identification and analysis of transactions
2.
Journalize the transactions
3.
Post journal entries to ledger (T-Accounts)
4.
Prepare unadjusted trial balance
5.
Worksheet is prepared (Optional)
6.
Journalize and Post adjusting entries
7.
Prepare adjusted trial balance.
8.
Prepare financial statements
9.
Journalize and post closing entries
10. Prepare post-closing trial balance.
---Beginning of next period:
Journalize and post reversal entries
Correcting Entries
Unfortunately, errors may occur in the
recording process. Errors should be
corrected as soon as they are discovered by
journalising and posting correcting entries.
If the accounting records are free of errors,
no correcting entries are necessary.
integral part of
accounting cycle
Done at the END
of accounting
period
Atleast 1 BS and
atleast 1 IS
account
Case 1
On May 10, a P50 cash collection
on account from a customer is
journalised and posted as a debit
to cash P50 and a credit to
Service Revenue P50. The error is
discovered on May 20, when the
customer pays the remaining
balance in full.
Requirement
Incorrect
entry
(done)
Correct
entry
(should be)
Correcting Entry
Case 2
Requirement
Incorrect
entry
(done)
Correct
entry
(should be)
Correcting Entry
12/1Cash
15,000
12/14
Salaries Exp.
600
Capital
15,000
Cash
600
12/2
Rent Exp. 800
12/20
Cash
2,000
C. Revenue
Cash
800
2,000
12/2
Supplies 720
12/28
Salaries Exp. 600
A/P
720
Cash
600
12/3
O. Equipment
7,500
12/30A/R
4,800
C. Revenue
Cash
3,700
4,800
A/P
3,80012/31
Drawings1,200
12/8A/P
Cash
720
Cash
720
1,200
Seatwork
Requirement:
1. Prepare for the
incorrect, correct
and correcting
entries.
Requirement:
2. Prepare
unadjusted trial
balance with the
incorrect entries
included