ACC1002/ACC1701

Tutorial Class
Week 6

Tutor: GUO, Kai

guok@u.nus.edu
Overview of Accounting Cycle
 What should we do to make the
balance of retained earnings
correct?

What should we
do to make the
balance of
temporary
account 0?
Closing entries
Salary expense Supplies expense Service revenue
Bal. 5,400 5,400 Bal. 2,100 2,100 13,400 Bal. 13,400
E Bal. 0 E Bal. 0 E Bal. 0
Rent expense

Bal. 800 800 Retained earnings

E Bal. 0
5,400 B.Bal. 63,250
Utility expense Dividend
800 13,400
Bal. 650 650
650 Bal. 3,600 3,600
2,000
E Bal. 0 2,100 E Bal. 0
Dep. expense
3,600
Bal. 2,000 2,000 E Bal. 62,100
E Bal. 0
Are closing entries one type of
adjusting entries ?
p. 171: E3-29A

400
500
600
6800
1000

6800
600
400
500
1000
p. 171: E3-29A
p. 171: E3-29A

1,300
20400
5,200
1,400
500
1,000
p. 171: E3-29A
Bank Reconciliation

Error spotting!

Deposits in Transit: deposits recorded by the depositor but not by bank.

Collections and interest: items that already collected and record by the
bank but not record by the depositor.
Outstanding checks: check written by the depositor but not received by the
bank.
Uncollectible items (NSF): checks that are uncollectible.
P.314: P5-64A
Internal Control System

Separation of duties:
Operations from accounting (sale vs accounting)
Custody of assets from accounting (cash vs accounting)
Authorization of transactions from custody of assets (cheque vs
authorizing of payment)
p. 302: E5-16A

Custody of assets from accounting (cash vs accounting)

Authorization of transactions from custody of assets (cheque vs

authorizing of payment)
p. 302: E5-16A
Financial ratios