Also, relate to them that transposing digits during the posting process is a common mistake. For example, a transaction might be for $630 and recorded in the journal as $630 but posted to the ledger as $360. If the trial balance doesn’t balance, it is common for students to have reversed a posting or transposed digits. Suggested In-Class Exercises: E2-16, E2-17 Prepare the trial balance and illustrate how to use the trial balance to prepare financial statements Preparing financial statements from the trial balance Exhibit 2-10: Balance Exhibit 2-11: Smart Touch Learning’s Financial Statements Correcting trial balance errors Lecture Notes: It may be helpful for students to view the accounting system from both ends. The natural process is to journalize transactions, post entries, and prepare a trial balance. However, once the chapter content is discussed, you can also begin with the trial balance and have students trace back to the ledger and journal to find a specific transaction. They may also get experience doing this when correcting a trial balance that does not balance. Suggested Exercise: E2-22 Use the debt ratio to evaluate business performance Lecture Remind student about the accounting equation: Assets = Liabilities + Equity. This makes it clear that the debt ratio represents the proportion of the total assets that to the “belong” creditors of the business. Conversely, 1 Debt ratio% is the proportion of the assets that belong to – the owners (stockholders) of the business. Suggested In-Class Exercise: E2-28 Chapter 2: Handout for Student Notes What is an account? Assets Liabilities Equity
Also, relate to them that transposing digits during the posting process is a common mistake. For example, a transaction might be for $630 and recorded in the journal as $630 but posted to the ledger as $360. If the trial balance doesn’t balance, it is common for students to have reversed a posting or transposed digits. Suggested In-Class Exercises: E2-16, E2-17 Prepare the trial balance and illustrate how to use the trial balance to prepare financial statements Preparing financial statements from the trial balance Exhibit 2-10: Balance Exhibit 2-11: Smart Touch Learning’s Financial Statements Correcting trial balance errors Lecture Notes: It may be helpful for students to view the accounting system from both ends. The natural process is to journalize transactions, post entries, and prepare a trial balance. However, once the chapter content is discussed, you can also begin with the trial balance and have students trace back to the ledger and journal to find a specific transaction. They may also get experience doing this when correcting a trial balance that does not balance. Suggested Exercise: E2-22 Use the debt ratio to evaluate business performance Lecture Remind student about the accounting equation: Assets = Liabilities + Equity. This makes it clear that the debt ratio represents the proportion of the total assets that “belong” to the creditors of the business. Conversely, 1 – Debt ratio% is the proportion of the assets that belong to the owners (stockholders) of the business. Suggested In-Class Exercise: E2-28 Chapter 2: Handout for Student Notes What is an account? Assets Liabilities Equity
Solution-Manual-for-Horngrens-Financial-and-Managerial-Accounting-5th-Edition-by-Miller-Nobles.docx