Hello we are here again this lecture number
nine isn't it? Ok we are going to go over that very important homework that you did
but let's do a few housekeeping things first of all we have this lecture this is lecture
number nine, and next lecture, lecture number ten and after that the test you'll be ready
to take the test hopefully. So we have this lecture next lecture, and then the test over
chapters one and two. Now I've already communicated to you guys when the test is for you folks
at home and I said this earlier as well in your syllabus is the due dates that you need
to take the tests by ok.
Now that's not that date you have to take the test on. That's
you have to take the test by that date and usually give you like a seven day window you
can take the test earlier than that date by about seven days if you want but you have
to have the test done by that date. Every semester what happens is this I give that
window that one week window and somebody waits until the very last day to do the test that
they're able to take that test and then something comes up work crisis and a kid is sick and
then they send me this email "oh please give me another day please please" you have a week
window a week long window to take it if you don't take that test by that day and you have
to take it the next day its fifteen points extra off your test for each day late that
you take it so it doesn't take to figure out that before long you just might as well not
even take it ok so if you wait to the very last day and don't give yourself any margin
you could get yourself in trouble and I encourage you to look on the JCCC website in the search
box put testing center hours and see what their hours are remember if they close at
eight pm on a certain night you can't just show up at seven forty five and expect to
get that test taken it's not like a restaurant they don't let you stay there until you are
done with your meal if they say they're closed at eight at eight they are scooting people
out.
So please be responsible for that folks at home I want to talk about how you study
for a test of mine how do you study for a Dave Krug test ok. The very best way to study
for the test and if you could only do one way do this way is this redo the homework
ok get a blank piece of paper out and redo the homework and I'm not saying look over
the homework ok one gives themselves a false sense of security when they just look over
the homework and says I know what he's doing here yeah that's a lot different from a piece
of paper staring at you in the face and you have to produce the answer isn't it? So redo
the homework don't be lazy and look over it ok for the students who fail my tests I guarantee
you I could have just photocopied homework questions that they've already done they've
already seen these questions they've already seen the answers I could of just photocopied
those and given it to them and they would've had the same bad test results.
If you can't
do the homework with a blank piece of paper you can't do the test if you can the homework
with a piece of paper you're in pretty good shape. But I'm always surprised there's always
some student that go well I can't do the homework and I don't really know what he's doing may
be it will be ok on the test. May be god will whisper answers in my ear? He's not going
to he told me this morning he's not going to whisper answers in your ear you have to
know how to do it? Kara? The practice test that you have. Yes I'm going to get there
so the first way is to redo the homework the second way as Kara said on angel if you go
to the lessons tab where I keep most of my stuff there's a practice test isn't there?
There's not only a practice test there's practice test answers isn't there? And that's kind
of nice it gives you break down between multiple choice and problems and that's how my tests
are between multiple choice and problems and it gives you some practice on multiple choice
doesn't it? So did you see Kara that I also have the answers out there to? I didn't print
it out though.
Ok so try to do that test alright try to do that test alright. But that practice
test is the second great way to study for my tests and its out there on angel under
the lessons tab. I have one for each section that will do alright ok. Couple other tools
that you can utilize when studying for my tests. Get out your text book and turn to
for example turn to page seventy six in your book page seventy six in your book.
Now you
can't read this but I juts kind want to show you what to look at in your book. Here's some
more multiple choice you can do right? For your to study for your tests they give at
the end of each chapter about five or six multiple choice and then they tell you the
answer's on in this case page ninety one.
Answers on page ninety one so do that multiple
choice quiz they give you at the end of that chapter that's the nice thing that they added
to this book. Ok so that's a third great to study for the test a fourth great way to study
for the test take a look back at page seventy for example on page seventy at the bottom
is a demonstration problem and then they give you a homework problem, and then they tell
what they want you to do and then you can do that but then they give you the solution
so you can see if you did it right and then it kind of explains the answer ok. So each
chapter demonstration problems alright. Make sense? That's another great way to study for
the exam. The fifth great way to study for the exam is if you look at the front of your
book let me make sure yours has a different cover so let me see where your URL where is
your URL? It should give that to you? The cover of your book is a little different.
If you have the cover of my book that's the that is the web page so I'll just blow that
up if you want to copy that down real quick ill just see if I could find where it is.
Ok I'll give you here it is you don't need to copy it down page twenty nine in your book
for example.
Ok there it is right there it's on that multiple choice quiz that I just showed
you every one of those now if you go out to that website for the book there is a ton of
things a ton of tools and resources that you can utilize. Now I will tell you that is probably
the most robust tool out there and it's probably the most seldom used ok and I like to list
that as the last way to study for my tests, because personally I don't think you have
to do that I think there's enough things that I give you practice tests, and the multiple
choice quiz at the end of the chapter demonstration problem, redoing the homework that I don't
want you go out there and see that big robust website and just get lost in the bells and
whistles of it does that make sense? But it is out there.
I think you also remember last
time Sarah was saying that we walked through the what the connect looks like the walk through
exercises with the dumbbell on the side so that's something else you can utilize if you
want. I don't think there's any shortage of resources of you utilize when study for these
tests there's certainly a lot more than when I was in school. Alright cool? Remember for
you folks at home know when you need to take the test by every time allow yourself some
margin.
Alright ok any questions on any of that? Ok I think one of the principles that
I've been trying to hammer home is this right here we talked about how this is making a
journal entry this is making journal entry and this is posting to the t accounts when
I asked you to do a journal entry don't give me a lot of t accounts but one of the things
I wanted you to do was I gave you an assignment that looks like this let me put it down here
correct? Did I give that to you? What I wanted you to do was figure out the ending balance
of each one of those t accounts now I just put some sample t accounts here and these
are different postings these originated from different entries right that they made and
now I just want you to put the ending balance here ok. So for cash that would be three ten
ok three ten is the ending balance of cash.
Now make sure there should only be one number
here don't add up four twenty and then add up one ten and have two numbers here don't
do that it should have only one number here ok and it should be on whichever one is larger
and in this case forty twenty minus one ten equals three ten ok. Now if it's a credit
balance account we start with the credit side eight thousand minus forty five hundred is
what? Thirty five hundred. Ok so there's the answer to the top two alright this is cash
that's an elven thousand one hundred oh help me out it's too early in the morning seven
thousand three hundred? Do we all concur with that answer? Seven thousand three hundred
here they have an accounts receivable its looks like we probably debited it when the
accounts receivable was created and we're decreasing or crediting it as the customer
makes payments to us right? So they made a one fifty payment a one fifty payment a one
fifty payment a one hundred payment to us so at this point what's the balance of this
account so they still owe us fifty dollars right? Ok here the last couple wages payable
we credit it for seven hundred we debit it for seven hundred what the balance zero ok
we satisfied that.
"How do you choose what side the zero goes on or does it matter?"
Good question Kara asked how do you choose which side in this case I always put the zero
on whatever the normal balance is side wages payable is normally a credit balance account
so I put it on the credit side great question. Ok now we have kind of a weird guy over here
ok. Kind of a weird guy over here cash now is cash a debit or credit balance account.
"Debit" it's a debit balance account ok when we figure out the balance of this account
what is the balance.
"Negative two hundred" What? "Negative two hundred "I can't hear
you. "Minus two hundred" this is a situation where this person is overdrawn it's actually
minus two hundred isn't it? Now let me show you a wrong way to do this is actually wrong
don't put minus two hundred here no don't do that you never and should never see a plus
or minus sign in here the way that this looks is right here there's no other way for that
to look except for that now cash is a normal debit balance account right? This is what
we call an account with an abnormal balance or it's out of balance ok, but have you ever
been overdrawn in your cash account have your parents ask them I bet they have I've been
before this person has spent more money than what they had in their account.
So they actually
if they looked at their checking account balance online on the statement it would say you are
overdrawn two hundred or you have minus two hundred, but we don't put a minus sign here
we put a two hundred on the credit side now with our knowledge of cash being a debit balance
account. A two hundred dollar amount being on the credit side is all that we need to
know that that has an abnormal balance you with me? And the way that that would look
let's say we were doing a lets say we were doing a trial balance let's say we were doing
a trial balance and we had cash listed over here and we had a debit column, and we had
a credit column the way that that would look is two hundred written in the credit column
make sense? Remember with a t account and with trial balance there's never minus signs
never ever ever ok cool? And remember this is what we're doing this is posting to the
t account this is not making the journal entry this is posting to the t account but these
ending balances so that we can prepare the trial balance and then after the trial balance
we prepare the four financial statements correct? Ok so I want you to be able to do that, are
there any questions on that any questions? Let's go ahead and take a look at exercise
two nine and exercise two ten these are good ones so take a look there.
Alright what they
want us to do is they want us to prepare journal entries for each one of these transactions
right? Then they want us to open the t account and they want us to post those and I talked
about how we do that line by line right? Then they want us to figure out the ending balance
of the t account much like we just did on that hand out and then they want us to prepare
a trial balance cool. So let's go ahead and take a look at that I'm not going to read
through each transaction I'm just going to put these up. Now hopefully you are pretty
adept at doing these by now if you're just totally just missing these and you're totally
lost then you are behind and you're not going to do well on the test. So I want you to start
assessing how well you're doing by how well you're doing on these homework problems that's
why we do them I can't show you all of them right now but let me show you a through f
so take a look at them and well talk about them in a second.
Yeah good question Cassie
if it's ok if the account you credited was revenue not fees earned that's fine fees earned
is just another way to say revenue. You also do not have to do those little descriptions
in italics at the bottom also your capital accounts such as in transaction a I usually
say capital comma m Dexter or just put capital. Owner's capital is fine too but I wouldn't
say equity I wouldn't say owner's equity, but it is an equity account but we want to
be more specific. Kara? "On f can you put unearned revenue since it wasn't paid straight
to them yet?" On f as in Frank? "yeah" no let's take a look at that the customer build
a customer twenty seven hundred as in fees provided they have provided those services
so it is not unearned remember the revenue recognition principle we recognize revenue
when it is earned when is it earned? When they have paid no when the product or service
has been provided in this case the service has been provided hasn't it? So crediting
an unearned fee an unearned revenue account and transaction f would be wrong this needs
to be a revenue account does that make sense? good question I love when you ask questions,
because these are probably questions people at home well have as well ok.
Notice how in
each situation the debits equal the credits if they don't then then you're messed up right?
Also make sure you're not sometimes students will make the mistake of like writing sentences
in their journal entries like they'll say cash invested or cash received or cash payment
no its just cash, cash, cash also make sure that you leave a little space or draw a line
between your journal entries or its very hard and make sure on the test that you put these
letter A,B,C,D,E, and F so I know which journal entry that you're on its very hard for me
to grade if students just give me that so please always put the date or the letter ok
on the test. Any other questions on A through F? If not let's look through the rest of them.
I was the last one I believe so take a look at those real quick and will talk about those
in a second here.
Ok did the debits equal the credits for each of those yeah they do.
Did they prepare them right did they list the accounts being debited first? And then
the accounts being credited next? And then did they indent the y indented all the credits
didn't they? That's the way to do it alright. Any questions on E through I? I promise you
on the test you will have one that looks like this ok I guarantee you, you have to do the
journal entries ok. Now the next thing they want you to do is post them to the t accounts
or to the ledger so let's see what that looks like. Might be kind of hard to see let me
back up a little. Now they went ahead and posted the letters you don't necessarily need
to write the letters there ok I'm going to highlight what ending balance is for each
one of these situations. Ok "withdrawals?" thank you ok so now I have all the ending
balances and they just figured out those ending balances just like we we're doing on that
hand out correct? Ok so is that what you got for your ending balance for all of your accounts
if so that's great.
Now what's the last thing they asked us to do after we do the posting
to the t accounts to do the trial balance and we just go through these accounts and
we just take the balances and we prepare a trial balance? Ok I could probably zoom in
on that a little bit ok of course one of the key things if there no plus or minus signs
if it has a debit balance it's in the debit column if it's a credit balance it's in the
credit column, and by golly that total debits column has to equal that total credits column
or you made a mistake right? So if the balance is zero do we still have to list it on here?
Good question what Cassie asked is accounts payable the balance is zero do we have to
list it you know I would you don't have to; however, I would here's why I would let's
say you did not list accounts payable because it has a zero balance well I still would balance
well what I might think as a reader or even as the preparer is I might think now wait
a minute I know we had accounts payable transactions did I mess it up? Did I forget to put it on
the trial balance? You see what I'm saying? But if I'm saying accounts payable credit
balance is zero then I know that that account has been considered it just happen to have
a zero balance.
So I would go ahead and list I wouldn't take off if you didn't, but I'd
go ahead and list it. Remember that trial balance let's look at it again that trial
balance is not one of the four financial statements but it's used to help us prepare those four
financial statements and remember we list the assets first then the liability then the
equity then the revenue then the expenses. This is kind of a simplified example isn't
it? Yeah Sarah? I don't know why I did this I didn't go in order from the t accounts but
I wrote my withdrawals first and then the capital." That's fine that's fine ok cool.
"Ok when you list the assets first say like on cash it was overdrawn it was negative two
hundred would list it over in the credit column? Yes like remember when that when we were talking
about when cash was overdrawn it would have an abnormal credit account yes in that case
what that would look like what that would look like is
it would look like that ok it would just be added with the other credits not being a minus
sign or anything in there it would just have its balance right there.
Are there other balances
that would have an abnormal balance beside cash? We they all can but are there any that
commonly could? Yes there really are lets say I have an accounts receivable from Jake
of twelve hundred dollars so I debited accounts receivable for twelve hundred and let's say
you pay me and you accidentally pay me too much you pay thirteen hundred well do you
see I have a credit balance in my receivable cause you over paid me ok I'd eventually refund
that to you.
But I would have for a while there I would have an abnormal credit balance
for an accounts receivable that same situation could happen on a payable if I over paid on
my payables. No you would just leave it as an abnormal balance in accounts payable and
then you'd probably get a refund back and just take care of it that way does that make
sense? Are we starting to feel better? You've learned a lot haven't you? In eight lectures
hopefully ok you've learned a lot don't forget that think back to just a few weeks back this
is only our ninth lecture think back to four weeks ago you didn't know any of this right?
Now I want to take a look at this slide that we examined and I could remember the first
time we went through it I said talking about this slide is not going to make much sense,
because we haven't talked about these things yet.
Well I think it will make more sense
now ok look at the steps in analyzing recording transaction the first thing we do is analyzing
each transaction and event from the source documents right? And those source documents
we talked about could be things like invoices receipts pay check stubs bank statements if
go get an ATM withdrawal you get a little receipt don't you? And so we use those source
documents to analyze each transactions and then the next step at the top right is we
record those relevant transactions in a journal a general journal that when we make a journal
entry right? Ok then after we prepare the journal entry we post those to the t account
or to the ledger and then what we do is then we prepare and analyze the trial balance we
just did these three steps for exercise two nine and two ten right? So that makes a little
more sense right? Questions on that? Ok good one other thing I want to show you real quick
is I at least want to kind of show you what let me get my pointer going here I want to
show you in real life sometimes the t account looks like this, and
it's kind of similar as a matter of fact ill just draw the t portion of the account
there's the t account do you see it? The only thing that they do is they keep a running
balance and they do it over to the side ok you see? I don't want you ever to be thrown
into the real world if you see it listed a little differently everything is the same
there just ok there's a debit for thirty thousand so the balance is thirty thousand then there's
a credit for twenty five hundred instead of putting twenty seven five down here they just
put it out here to the right.
You with me? Ok so that's sometimes how you will see it
listed in the real world percei. Questions on that? What I want to do know is I want
to go ahead and work on a few things here in class I think it will be good to do these
and I want to do exercise I don't know if we will have completely time to do this but
let's go ahead and try I want to do exercise two point eleven and exercise two point twelve
on page seventy nine and eighty.
Now exercise two point eleven and exercise two point twelve
I want to change the instructions a little bit. Ok they tell you to look at those transactions
identify which ones create revenue and then make journal entries for those transactions
I want you to go ahead and do journal entries for all of them and then ask yourself which
ones created revenue on two eleven. And then on two twelve I want you to go ahead and do
journal entries on all of them and then ask yourself which ones help create expenses does
that make sense? So were going to have some time here as the music rolls you folks at
home as always when we work on these in class I want you to work on them as well. So let's
work on exercise two point eleven and exercise two point twelve alright. (Music 32:30-45:00)
ok if you're not done at home folks just pause it and start us up when you are done.
Ok let
me go ahead and go to the screen over here and let me show you the answers to problem
two eleven ok take a look at those real quick check your work and then will talk about them
here for a minute. Can you guys see that in the back row? Student: "so its ok to abbreviate
notes payable" yeah thank you a lot of times you'll see accounts receivable abbreviated
A/R, notes payable abbreviated N/P, accounts payable A/P those are very common I don't
realize even when I'm doing it when I'm not so yes good point.
Kara? "Now on the other
one we put fees earned instead of revenue" either one "ok they're interchangeable" yeah
they are interchangeable good. So those are the answers to two eleven and now they ask
us which of these transactions created revenue correct? Well see the reason I like to do
all of them is if you do the journal entries I thinks it's quite apparent which create
revenue in this case the ones in yellow, because revenue is being credited right? The other
situations did not create revenue now what this is trying to emphasize to us is just
because cash is coming into our business that does not equate to revenue all the time.
Ok
now the lay person sometimes think cash comes that must mean revenue not necessarily look
back at that in the first situation cash came in but it was an investment of capital by
the owner in situation D we got cash of ninety one fifty but we haven't performed the service
or given the product right? That's unearned revenue which is a liability. In situation
E cash came in but it was in payments of a receivable that was set up. We don't recognize
revenue we already recognized it back then. And then the last situation we simply got
a loan of one hundred and fifty thousand that's not revenue isn't it? Ok so those are the
journal entries for exercise two eleven and the ones in yellow are the ones that helped
create revenue the other ones did not. Any question on two eleven? Let's look at two
twelve those are the answers to exercise two twelve take a quick look there.
48:14: ok
now they ask us on this one which one of these created expenses right which ones created
expenses? Well just look to see which ones have a debit to an expense account, and I
think it's the ones in yellow situation B and situation D created expenses, but the
others did not did they? In the first situation we were simply paying cash in a previously
existing account payable right? In situation C we are purchasing a fixed asset and that
is not an expense well talk about that more in chapter three. And in the situation E is
withdrawals and expense account? It does not go on the income statement it goes on the
statement of equity so there are the five situations or the five journal entries for
exercise two twelve.
But only situation B and situation D created expenses correct?
And I think what they are trying to convey is just because cash is going out it does
not necessarily an expense is being incurred, and we kind of learned that as well. Alright
questions on that? Alright let me give you your homework and then I send you on your
marry way what I want you to do pay attention to this I want you to do exercise two point
six and then I want you to do problem two four (A) ok and we haven't done problems before
but there's quick studies in the books and there's exercises in the books now were doing
our first problem and that's on page eighty four problem two dash four (A) do everything
that they ask you to do ok.
Alright ok remember only one more program and then after that
it will be test time see you later guys..