4b4e38a4-1395-415d-94fd-3fc7bb2ec59f - Lecture & Workshop 3 RFCC.mp4

LECTURER: Ok, hello everyone.

Welcome again to the Accounting
and Governance class.

Could anyone please tell me
if the volume is ok?

Perfect. Ok, thank you.
Thank you.

Still, I hope you have had
a very good week,

and I hope that you will do well
in your first assessable homework

that is in the process of marking

by another lecturer,
that is the person who will mark

all our assessment.

So just be a bit patient,
during this week we will release

the results of the first
assessable homework.

Now today we will continue
with what we started last week.

Last week what you learnt
was how to record transaction

using debits and credits
and preparing the journal entries

and you know that for
each journal entry

you need at least one debit entry
and one credit entry.

it could be more than two,
but normally we have one debit

and of course the total debit
and total credit should be the same,

the same amount in each journal entry.

So what we will go through today
another type of entries

which is adjusting entries.

I hope you have studied the
material that is posted

on the course learning agreement,
you have watched the videos

and looked at the PowerPoint too
and have of course understanding of this.

But as usual I will explain everything
you need to understand well,

how to deal with these
different types of entries

that are the adjusting entries.

The purpose of this session
is that you will end the session

with a clear understanding of that,
adjusting entries and also closing entries

which is another type of entry.

The journal entries that you
learnt last week

are entries that you prepare from
transactions that you have in the business

so when the accountant
records these transactions

the accountant receives information
that is mainly through the cash received

and cash paid so they are
very based on the cash.

Cash received and cash paid.

I will answer that they...

They are mainly related to
cash received and cash paid

but sometimes the accountant also receives
information of invoices

that are sent to customers so they record
an income or revenue and purchases

so they record the purchase as well.

So not all are cash journal entries
but most of the I would say yes.

The first difference in adjusting entries
is in adjusting entries,

we do not involve cash.

Cash is never involved
in an adjusting entry.

So what are these adjusting entries?

And in this I will answer what they do.

Why adjustments are not done each month
as a normal activity

then it will not be such a big adjustment
and you are totally correct here.

But that depends...

it depends on what is
our accounting period.

It depends on the company.

The normal accounting period
is one year.

If a company does not prepare
financial statements every month

for example, or every quarter,
well, it will happen what you said.

The adjusting entries are
at the end of the year.

But what's happening there
in the real world

companies prepare the financial statement
every quarter or even every month

and in that case if we define the
accounting period as one month

that means at the end of the month
we need to prepare the adjusting entries.

The concept of adjusting entries is that
we prepare adjusting entries

at the end of the accounting period,
ok?

That is the thing.
At the end of the accounting period.

If the accounting period is one month
we prepare adjusting entries

at the end of the month.

If the accounting period is the whole year
we prepare the accounting entries

at the end of the year, ok?

That is one concept that we need to
have in relation to adjusting entries.

The other thing is what we are adjusting
because the name is adjusting, ain't it?

What we are adjusting with these entries.

We adjust revenues or income
and expenses.

That is what we adjust to reflect
in the financial statements,

all the income or revenue
that has earned in the period,

and to reflect all the expenses
that have been incurred during the period.

That is what we show with
the adjustment entries.

That's why we cannot do adjustment entries
in the middle of the month

or at the beginning of the month,

it's always at the end of the period
because at the end of the period

we want to have in our financial statement
all the income earned in that period

and all the expenses incurred
in that period.

So this is the most important concept
to start with adjusting entries.

Then as I said some expenses
and revenue menu can be recorded exactly,

that's the things, others,
some expenses revenues cannot be recorded

we need to adjust to have
all the expenses incurred recorded

and the same for income or revenue.

To align with the business
activity statement,

the business activity statement
is the tax concept.

In many cases the tax period is the same
as the accounting period

in that case a year but we need
to be careful that we do not mix

with the tax concept when we
are talking with accounting

because there may be some differences.

Ok, so we will start as usual today
with the lecture in which I will pose

four multiple choice questions.

You will answer the questions,
and this will be a good feedback

for you and for me about
the understanding of some basic concepts

of this topic.

If I see that the distribution of
your answer is not very good

which is a very good feedback
in the sense that that lets me explain

why this answer is correct
or why it's not correct

for your own learning.

We will discuss that and I will use
these questions to explain

probably some of the concepts
if they are not clear.

So please feel free as usual to ask
any question during the lecture

and then during the workshop.

Last week we talked for more than
four and a half hours

in the whole thing because
of the number of questions

but probably today we will be less than
that because the topic is more specific

but I am happy to answer all the questions
to explain well,

the main purpose is for you
to understand these topics.

That is the main purpose of this topic
because then

you will be evaluated on this topic.

The second assessable homework
will be next week

after the topic four,
module four.

So that assessable homework two
includes this module,

module three,
adjusting and closing entries

and also the module four.

That's why it's very important,
if there is anything you do not understand

please ask, ok?

I hope no Jade (INAUDIBLE)

Jade I hope you will not be
four and a half hours.

Ok, for me it's ok.

I have enough energy to be
four and a half hours.

I feel sorry for you sometimes
after you're very tired after that time

but we will do the best we can.

Ok, so we will start with
the questions here.

Here we have the first question.

Have a look.

The question is when is the $1000
considered to be n?

So it's about the day when this
is considered to be n.

Look at all the dates that you have there
and you can vote for your answer.

When they are n.
Take your time.

Pima can't see properly, ok.

Pima, you can zoom,
I will put a bit bigger.

Maybe that can be...

Ok, good.

Ok. Uhm, ok.

What is the answer?

We have a distribution of answers
in the poll

so it's good to explain a bit.

That is the feedback I need,
so if that other whole distribution

of your answers means, yeah.

I need to explain how can we determined
when the $1000 are n.

Most of you actually answered correctly
but there are of course,

there are many different answers.

So this question is about when revenue
is n, ok?

That is the question,
we are using accrual accounting.

In accrual accounting revenue is recorded
when it is n,

not when cash is received,

and expenses when they are incurred
not when they are paid, ok?

So we need to identify from the dates
when these $1000 are n.

The day the manufacturer received a
purchase order for 10 dresses

for a total price of $1000,
15th November.

On 15th November the manufacturer
received the order, nothing happened,

so the revenue is not earned, ok?

The 10 dresses were delivered
on 30th November.

Delivered means that revenue is earned.

When is revenue earned?

When the products are delivered
to the customer.

They are passed from the company
to the customer.

At that point, revenue is earned.

In the case of services,
it's when services are provided.

When the service is provided,
service revenue is earned.

So that is the correct answer, ok?

There is some echo,
probably someone has the microphone on.

So this is the correct answer,
and the other dates,

the customer is sent an invoice
on 5th December.

No, the producer already delivered it,
doesn't matter that the invoice was sent

after the delivery of the produce.

The payment of the check is received
10th December.

Again, it's not related with when we
receive the payment

or when we bank the payment.

So, the correct answer is that.
any questions?

What is the answer?
I thought....

I put here, can you see the blue...

I wrote in the screen,
the blue circle.

It doesn't save.

30th November, that is the correct answer.

I'm not sure if...
Can you see because I drew a blue circle

Can you see them?

Ah, it's not a line.
Double is in the white space.

Ah, I didn't know that. Ok.
Ok, interesting.

In my screen it's exactly in see
but probably there are differences in this

Probably just zoom each,
probably.

I move my zoom in and out
and the circle is in see, that's the mode.

Ok, we go to the next one.

If a resource has been consumed
but an invoice has not been received

at the end of the accounting period,
which of this is correct?

I will update...
It doesn't move the page.

Ok, if you cannot follow this
I can change to...

Yes, I will reset the board.

Ok, so if a resource has been consumed
but an invoice has not been received

at the end of the accounting period,
what is the situation?

We have some different answers
but most of you are correct.

The correct answer is B.

Ok, B, an adjusting entry should be
recorded to recognize the expense.

Why is this?
Because the resource has been consumed.

When expenses are incurred is when
the resources are used or consumed.

That means that need to record
an expense, ok?

So in this case the only one,
and adjusting entry should be recorded

to recognize the expense.

Any question on this?

Is it clear?

Ok, we will go to the next one,
thank you Jade.

Number three, if an entity fails to adjust
the prepaid rent account

for rent that has expired,

what effect will this have on the
monthly financial statement?

Here you need to thing a bit more
because it's what's happening,

the adjusting entry was not recorded,
what would be the effect on that?

I will update the poll.

The previous answer was B.

It is prepaid rent failed to adjust
for the month that was paid.

This is the prepaid rent that was recorded
as a prepaid rent

but now in this month the rent has expired
so it was used,

the office or the building
that we are renting was used, yeah.

You see in my poll you still chose
number one, is it correct?

Ah, yes, yes.
I didn't change the numbers,

I just updated the poll solutions,
but I didn't change the number.

This is for the questions, for each
question I update the poll,

I do not change the number because that
takes a bit more time

to change that number
so I just update the answers

to lead them in zero,
you come out again for each question.

Ok, so we have a distribution of answers
and now there is a whole distribution

of the answers,
so I think this is important to explain.

If an entity fails to adjust
a prepaid rent account

that means we have a prepaid rent account
we pay in advance the rent of the office,

we'll assume that this is the rent
of the office.

We pay in advance the rent of the office
before we use the office, we pay.

How do we record that?

We record that as a prepayment
which is an asset, we debit that,

and we credit cash.

So we debit prepayment,
we credit cash.

That was the original entry.

Now at the end of this period,
it says that the rent has expired

so we used the office for this period
so that is what we need to adjust.

We need to credit the prepaid rent
for the amount of the rent that expired

we need to credit prepaid rent
and we need to credit the expense.

What happens if we do not do this?

I will write in the same paper
what this means,

so we will...

when we do the adjustment
we will increase, ok, the expenses,

we increase expenses,
that is one of the entries,

we debit rent expense
and we will decrease the prepaid rent,

the prepayment, ok?

I will adjust the prepayment,
pre.

This is the prepaid rent
which is an asset.

What effect will this have
on the month financial statement

if we do not record this?

If we do not do this,
what is the effect?

What happened with the expenses?

Expenses will be understated
because we didn't record this.

What happens we will have in assets,
assets will be overstated.

So to find the right answer here
you need to look at all the answers.

What answers we had that assets
are overstated? Only D and E.

In C, well...
Sorry, C, D and E.

In A it doesn't say anything about assets
B, nothing about assets,

so only C, D and E assets
will be overstated.

That is one thing because of this,
because we didn't decrease the prepayment

which is an asset.

Assets will be overstated.

How will we know which one is correct?
C, D or E?

We need to look at those expenses
will be understated,

but we don't have this,
C, D and E talk about profits.

Then you need to relate profit
with expenses.

If expenses are understated,
what happens with profits?

Profit will be overstated, ok?
Profit will be overstated.

That's why E will be incorrect also.

Is that clear that, very well?
Profit increases?

So we need to relate this,
you can see now we are using

all the elements that you had
planned before, ok?

Profit equals revenues plus expenses.

These expenses are understated,
profit is overstated.

Any question?
Ok.

Yes, (INAUDIBLE)
I need to add one thing.

Profit will be overstated and that is
the answer for question D and E.

What is the difference between D and E?

Equity will be understated,
in E equity will be overstated.

So now we need to relate
the profit with equity.

So when profit is overstated,
equity is overstated.

If profit is understated,
Equity is understated.

So what is correct?

Asset overstated, profit and equity
would be overstated.

Ok, that answer your question Jade?
Good.

Ok, so we will go through the last one.

Here you have the last one

On 1st September Carlson Limited borrowed
$10,000 from the bank for three months

at the annual interest rate of 9%.
Annual interest rate 9%.

Principal and interest are payable
to the bank on 1st December,

so this is for three months long.

If the company prepares monthly
financial statements

the adjusting entry that the company
should make for interest on 30th September

that means after one month would be
which of these ones?

I will update the poll.

Ok. So how we determine this,

we need to look at what is the interest
for one month

because the expense incurred in this case
the interest expense,

is the interest that...

that is the interest for only one month.

We are preparing the adjusting entry
at 30th of September.

The loan started on 1st September
so it's the interest for one month.

This will clarify the answer for if you
calculate the interest for the year.

Annual interest rate is 9%,
for one month it will be 9% divided by 12

that is the interest per month,
and then you multiply by $10000

to calculate what is the interest
per month which is $75.

So at the end of September
we need to record,

interest expense $75,
and credit interest payable

because it will not be paid until
1st December.

So we debit internet expense
we credit interest payable, $75,

the correct answer is D, ok?

Ok at that?

When we have a loan
we need to pay interest.

What is that interest?
It's an expense.

The expense incurred because
we borrowed money.

And we can calculate based on
the interest rate.

The interest rate is always given
and always is given annually,

so what is the annual interest rate?

In this case it is 9%,
you can see here.

9% is the interest rate,
but this is the interest rate

for 12 months, ok?

So to calculate, very well Joshua,
to calculate by months we need

to multiply the 9% by 112,
or simply divide it by 12, ok?

And then you will have what is
the interest per month

because between the 1st of September
and 30th September

we need to prepare the adjusting entries.

The adjusting entry is one month,

so the interest expense will be
the interest for only one month, ok?

So very good.
Good at that, and that is $75.

Ok, so we've finished
the multiple choice questions,

do you have any questions about concept
because now we will apply the concept

in exercise about adjusting entries,

so any question about concepts that
you would like to ask at this point?

All good?
Ok.

So, we will go...
Excellent Ruby, thank you.

Yes, yeah, we will go through
the practice questions now.

And I will start briefly with a very
brief review of what you have learnt

about adjusting entries.

It is only three months,
just another.

It's only three months long because
it starts on 1st September

and is payable on 1st December.
The interest and the principal both.

So you pay back the $10000 on 1st December
with all the interest of the three months.

Ok, no we will talk a bit about
adjusting entries.

I will explain using this diagram
that you have in your PowerPoint

and you have seen in your videos,
I will not go into whole detail of course

but just with this...
this is the big summary.

The big summary of adjusting entries.

We have two types of adjusting entries
or would say four types

if we combine revenues and expenses.

But we have the accruals
and we have the prepayments, ok?

They are two different adjustments.
What means accrual?

Accrual when talking about revenue
means receivable, ok?

Accrued revenue it will be the same as
to say revenue receivable.

Accrued expenses when you see this term,
accrued expenses,

that means expenses payable, ok?

So accruals means receivable or payable

depending on whether it's revenues
or expenses.

And then we have the prepayments.

Prepayments means payments in advance,
ok?

We can receive a payment in advance
and that is what we call earned revenue

or revenue received in advance, ok?

It's the payment received in advance, ok?
That is payment in advance.

Or we can pay in advance and that is
what we call prepayments.

So these adjustments,
and these are all the adjustments,

there are no other adjustments for
timing differences.

There are adjustments to correct errors,
we will not go there,

we are talking about the timing difference

that means to record revenues
when they are earned,

expenses when they are incurred.

All the purpose of adjusting entries
is that,

to record the revenues
in the accounting period

that are earned in that accounting period
and to record expenses that are incurred

in that accounting period.

From the normal transactions that
you learnt last week,

we may have many cases in which revenue
was not recorded,

expenses was not recognized as well,
and we need to adjust them

because the main purpose
of the financial statements

in particular the income statement
is to show the revenues

earned in that period,
in the period of the income statement

and to show the expenses incurred
in the same period.

So that is the purpose
of adjusting entries,

to reflect revenues earned and expenses
incurred in the accounting period.

So this is the big summary.
Now how do we deal with this?

Well, in the case of prepayments

we have different accounts that can
be considered as a prepayment.

One is the prepaid expenses like
prepaid insurance, prepaid rent,

but there are others that we can give
the same treatment of this prepayment

which is supplies or depreciations.

That means the payments that
the company makes in advance

and therefore they are considered
as prepayments.

So what are the terms involved
in this prepaid expenses?

Well, we have an asset that has an
unadjusted balance.

For example, we have prepaid insurance.
That is an account of asset.

And we do not adjust this because we pay
for that at the beginning of the t,

ok, 1st of January for example,
and then on the 30th June we are halfway

of the total period provided by the policy.

The policy normally,
the insurance policy covers 12 months.

So we are using the policy
during 12 months.

But what's happening in June?

Well, we do not have the same amount
in assets because we already consumed

half of the policy, six months,
so half of the policy has been consumed.

Then we need to adjust the amount
in assets.

Here you had the unadusted balance
of the asset,

that is the total amount of the policy,
we need to adjust that.

How do we adjust that?
We need to record an expense.

An expense for the six month use
of the policy.

So we will record debit expense,
that is the adjusting entry,

we debit the expense,
and we decrease the asset

that means we credit
the prepaid insurance.

So you can see here,
this is your adjusting entry.

We have a debit entry,
we have a credit entry.

We debit insurance expense,
we credit prepaid insurance.

So this is one case.
And the same we will use for prepaid rent,

for supplies, for depreciation, ok?

Jade hit the question.

Oh good, excellent Jade.
That's my purpose,

to explain in detail what it means,
this thing.

Is there anybody that might have
a question on this?

We will go through the four
that are adjusting entries.

This is related to the prepaid expenses.

Ok, we go through the second one.

The second one is what we call
the un-earned revenues.

So revenues received in advance,
what is the concept?

Imagine that the company has a building,
and they are renting offices

from this building so they have a
number of clients that rent offices.

And they ask the tenants to pay in advance
before they start using the building,

they have to pay for example
three months in advance.

So the company received the cash
for this,

but the tenant still is not using
the office,

so how will we record this first entry?

This is the entry that you learnt
last week, this is a normal transaction.

The company receives cash
so we will debit cash, ok?

And we will have this unearned revenue
or rent revenue received in advance

which is a liability for that amount.

Why is this a liability?

Because at this point the company
has not provided yet

the office for the tenant to use, ok?

The tenant has not used the office yet,
they pay in advance.

So we have a liability because we have
an obligation to provide the office,

the tenant already paid.

Now, what happens after one month?

We are doing financial statements
every month.

We need to prepare an adjusting entry
because we already provided this service

to the tenant,
we already provided the office,

the tenant used this resource
already one month,

so we need to adjust
our liability accounts.

So the liability account has
an adjusted balance, ok?

When the tenant pays in advance,
and now after one month

we need to reduce this for the month
the office was already used.

So we will debit this liability
that is part of the adjusting entry,

and we will credit revenue because now
we earn this revenue,

that is the rent revenue.

We earn that because we already provided
one month of the office to the tenant.

So here you have again,
the adjusting entry.

We have one debit entry,
the rent revenue received in advance,

a debit entry,
and we will have a credit entry

which is simply rent revenue.

Any question on this second one?

We will practice with many exercises today
for you to have a very,

very clear understanding
of the adjusting entries.

Ok, the last two.

The last two I would say they are simple
adjusting entries.

We have accrued revenues.
As I mentioned before,

accrued revenues means
revenues receivable.

This is the case when the company
sells products or provides services

but we still do not record that sale
and we have not received the cash yet,

but the service is provided
or the products are delivered

so we need to record revenue.

If we have not recorded this
in the normal journal entry...

Journal entry that you learnt last week,
we will need to record that revenue.

Since revenue or savings revenue,
or we credit this.

What will be the other accounting ball?
It will be the receivable.

An accounts receivable which is an asset

so here you have debit
the accounts receivable

credit service revenue
or service revenue,

depending on whether we are
selling produce or providing services.

So that is the third adjusting entry

and the last adjusting entry
is accrued expenses.

That means expenses payable.

So this is the case when we have
an expense incurred

but we have not recorded that,
the most typical case is employees

that work during the month.
We have not paid their salaries yet

because we pay the first days
of the following months,

so we didn't record the expense
but they already work,

so there is a resource that has
been consumed

and therefore we need
to record an expense.

We need to record an expense
and so we debit salaries expense,

for example, but because we have
not paid yet in this period,

we need to record a credit in this
liability which is salaries payable.

So here we have our adjusting entry.

This is in a very brief summary what
you have learnt about adjusting entries.

Any question at this point?

All good?

So we can now apply these two
practical exercises

and we will work with many
adjusting entries,

so you will have the opportunity,
to practice now with this

so I will put that...

Can you see the exercise?
I am not sure about the zoom,

if it is ok or not,
but I hope it's ok.

Ok, excellent, excellent.
Thank you Jade, thank you all of you.

Ok, so we will apply to this exercise
and we will start the exercise

at the point that we left last week.

Do you remember what we did last week?

We prepared the normal journal entries
that come from transactions

and then we post the journal entries
into ledger accounts,

and then we prepare a trial balance.

And we call that the unadjusted
trial balance

because it's a trial balance that
is prepared before the adjusting entries.

Ok, so we will start with this,
the unadjusted trial balance, ok?

I had 30 of you.

And as you remember the trial balance
is simply the list of all the accounts,

here you can see cash, account receivable,
prepaid insurance, supplies,

all the accounts of the company, ok?

With the ending balance at
the end of the period

so you can see the trial balance,
the unadjusted trial balance

is prepared at the end of the period
is the first thing that we do

at the end of the period before preparing
the adjusting entries, ok?

So we prepare the unadjusted trial balance

and we have the ending balance
for each of these accounts.

The ending balance of cash,
the ending balance of accounts receivable

and service revenue is sitting
on the fence, yes.

It moves to the fence,
it should be here.

It should be on the column of credit
of course,

that is a typing thing.

Service revenue should be
in the credit side of course,

76,600.

Salaries expense, rent expense,
so you have all of these.

The characteristic of the trial balance is
that total debit should equal total credit

and you can see total debit, 201200
and the same as total credit.

So this is our starting point
for this exercise.

What means this?

All the normal journal entries
are already recorded,

all of them are posted to
the general ledger

and we prepare this unadjusted
trial balance.

What is next?
Well, here you have the exercise.

One thing before we go to the next page
these are not the total,

all the accounts of the company.

There are accounts that they have
with zero balance,

and of course they are not in the
unadjusted trial balance

but here you have them listed.

They accumulated depreciation
is one account,

office equipment another,
electricity payable, salaries payable,

and so on.

So there are a number of accounts
that have zero balance,

and therefore they are not in this
unadjusted trial balance,

but they are accounts.

So we will go through the exercise.

Here we have added data.

This added data refers to
the adjusting entries

that we need to prepare.

They are related to revenues earned
or income earned and expenses incurred

so we need to prepare one adjusting entry
for each of this additional data

and that is what is required,
if you look at the question requirements,

prepare the adjusting entries
for the month of June

so this is just for one month.

Prepare the adjusted trial balance

that is prepared after
the adjusting entries

and we will calculate the profit
for the month.

So we will go one by one
to see how to prepare this.

And I will detail all of them
in this first exercise

and then I will go a bit more quick
in the second exercise,

or in the exercise of the workshop.

So the first, supplies on hand
at start of June total 7200.

What this tells you,
supplies on hand total 7200.

Well, if this is the data we have
that means somebody went to the...

To the place that we have the supplies,
they count them,

they value them and at the end
the conclusion is

we have 7200 supplies on hand.
That means not used.

How much do we have in our
unadjusted trial balance?

So we need to look at here,
supplies. 13,300.

But it says that we have only 7200 so
that means we need to make an adjustment.

We need to reduce this 13,600
and to record an expense,

a supplies expense for the difference.

So 13600 less 7200 that we have,
that means we have consumed

or used 6400 of supplies,
and that is the adjusting entry.

We need to record the expense for this
so we will have a supplies expense of 6400

and we will credit supplies to reduce
the supplies account.

So here you have the first journal entry,
adjusting entry.

Supplies expense debit 6400,
and supplies credit 6400.

When you do this and you credit supplies
by 6400,

if you remember the ledger accounts
when we credit one of the ledger accounts

that is supplies, that will decrease
the balance of supplies account

which is 13600,
so now the new balance of supplies

is 7200 which is the amount that we
really have in supplies.

Any question on this?

So this is the first adjusting entry.

Yes Natalia, yes please tell me.

NATALIA: Hello Herman,
yeah I see...

I've seen how this, I guess many of us
do print out this worksheet information

of the sample of the questions,
and we have ended one,

and last lecture I was asking you
to let us print full ones

because it's hard to follow up because
our worksheet is empty at the moment,

it means we follow up on the computer
but can't do notes straight on our papers.

Yeah, this will be great because...

HERMAN: Yeah, actually I remember that
and at 10 am today,

I uploaded the solution for the lecture
exercise and the workshop exercise.

I opened that for you and for everybody,

so you can print them and you can be
with the solutions

and you can follow the solutions
NATALIA: Ok, now yeah...

You do this adjusting notes
much in advance

but is it, you can give us indication
when you do apply the solution

on a regular basis because our paper
is usually a couple days before

I print out,
and have this, yeah.

HERMAN: I will do that because I agree
with what you asked me last week.

I agree that it's good that
you have the solution

to follow the lecture and the workshop
with the solution so you can take notes

in the solution which will be easier.

That' s why I opened today at 10 am and
I put an announcement on the blackboard

for all of you to know that they are ready
for you to print,

and I think that is what we talked
because the idea

is that you try to do this by yourself
without the solutions,

and that is the main purpose,

that's why I put in the same day
of the lecture and workshop.

I will release these only for you
to print out and to take that today,

later in workshop.

NATALIA: Ok, and how many it means
they're empty for purpose,

we have a chance to try,
and field solution is gonna be

in the very last day before lecture,
for future use.

HERMAN: Yes, I will do that in that way
all the time.

So I actually did the two purposes.

One purpose is for you to try
without solutions,

just with your learning from the videos
and PowerPoints,

and second, to have the solutions
before the lecture and workshop

so you can go through them as well.

Ok, good.
Excellent Natalia, thank you.

Now we can go to the second one.

The second says an electricity bill
for 1200 has not been recorded

and will not be paid until next month,
so what does this description mean?

If the company receives an electricity
bill for 1200,

it means that they used,
they consumed electricity for this amount.

It is already consumed therefore
it is an expense,

but has not been recorded.

So the only thing,
this is a simple adjusting entry,

the only thing that we need to do
is to record the expense,

so we will have electricity expense, 1200,
but because it was not paid this month,

next month will be paid,
so we will credit a liability

which is electricity payable,
and that is what you have here.

So in this adjusting entry we will record
debit electricity expense 1200,

credit electricity payable 1200.
Yes Natalia?

Stella, Stella. I need to put you
as a caption here, Stella.

Give me a second because I need
to put the caption here of Stella

but I don't find you in the list,
we have a big list of students.

Near the top, ok?
Ah, there it is. Thank you Stella.

Ok, yes Jade.
You have a question?

JADE: I do, yes.

I put there instead of electricity payable
I put accounts payable.

Is that okay or is that a problem?

HERMAN: It is ok.
If we are very strict in that

which is not the case because accounts
payable is rational to use this.

When we talk about accounts payable,
It's the accounts payable to suppliers,

so we always link accounts payable
for the amount that we owe to suppliers.

That's why it's better,
I would not consider it wrong

but it's better to put this explicitly
electricity payable because this is...

These are utilities that the company
received,

so electricity or water
or that type of thing.

So I would prefer to put separated
from accounts payable

just because the concept of accounts
payable is linked to suppliers of produce.

Ok? But it's not wrong.

Ok, any other question for the second...
for the second adjusting entry?

So we'll go through the third
adjusting entry.

Insurance policy, here you can see
one statement that didn't say anything,

and you cannot do anything unless
you go to the data

that is in the unadjusted trial balance.

The statement says the insurance policy
is for a year commencing 1st May 2019.

Well, this is all what you need to
prepare the adjusting entries,

because you have the unadjusted
trial balance.

The only information here is that the
insurance policy is for one year,

12 months, and starts on 1st May 2019,

so we will see what is the information
we have in the unadjusted trial balance.

First, this company started
on 1st May 2019

which is the same day
of the insurance policy, ok?

Insurance policy is added 1st May 2019.

And the trial balance is at June 30.

What is the prepaid insurance?
9600.

9600, this is for 12 months,
so how much is a month?

It is 800, so this is equal, ok,
1800.

300 per month.

300 per month.
Sorry for my numbers, I'm not very good.

So 800 is the insurance expense
that how much we use

or consume of this policy per month.
800 per month.

Now how many months between 1st May
until the 30th of June?

Two months, exactly.
Two months.

So what will be the expense
that we have to recognize

or to recall on the 30th of June?

The expense for two months,
that means 1600.

That should be a debit
in insurance expense,

and a credit to prepaid insurance
to reduce this 1600

because we already consumed 1600
of insurance.

So the journal entry,
the adjusting entry for this will be

debit insurance expense 1600,
credit insurance expense 1600.

Ok, any question on this?

Ok, so we can have a look at the...
Thank you Jade.

We can have a look at the next one.
Salaries, sorry, not salaries.

That is the next one.

Number four, services were performed
during the period in relation to $3000

of revenue in advance.

What does this description tell us?

First the description is telling us that
we received revenue in advance,

that mean we received a payment
in advance

and now in this period we provide services
for 3000 of that payment.

We need to link this with how much
we have in revenue received in advance

in the unadjusted trial balance
so we will have a look.

The unadjusted trial balance, state this
revenue received in advance, 4800.

Debit because we received this amount
and we didn't provide the services

so we have an obligation to provide them
and therefore it is a liability, ok?

Now we provide services for 3000
of this 4800,

so we need to record a decrease in service
revenue received in advance,

that means we debit 3000 in this account
and we will have the current balance

of all these accounts,

so we debit 3000 in service revenue
received in advance

and we will have a credit in service
because we earned already this revenue.

We provided the service.
Yes Jade?

JADE: Is this classified as an adjustment
or is it just as a mistransaction?

HERMAN: It's an adjustment because
the original transaction

that we already recorded, it is here
in the unadjusted trial balance.

What was the original transaction?

When this happens, the service revenue
received in advance I will write here, ok?

We have debit cash because
we received the payment, ok?

That was in the previous period.

We record cash for 4800.
Sorry for the numbers.

So 4800. We debit cash,
and we credit, ok?

This revenue received in advance,
I will put it just like that.

Revenue received in advance
we credit 4800.

This is the normal journal entry.
This is the normal transaction

that we recorded in the last period,
and that's why when you look at this entry

and we post the accounts in the ledger,
this is what we have there, ok?

That is the original transaction.

What happens now is that we just provide services.

Of course we didn't receive more money
because already we were paid in advance

but we provide the service so we need
to decrease this obligation or liability

for the 3000 already provided.

Well, George, it says because the concept
of revenue received in advance,

the concept of that account
is that received cash in advance.

That is what we received in advance,
cash, the payment,

so if you look at the description,
services were performed during the period

in relation to.
In relation to what?

To revenue received in advance.

If you look at this description,
revenue received in advance,

what it means is that the company
received cash in advance

to provide the services.

The customer paid before we provide
the service to the customer.

Ok, so cash was involved
in the original transaction

and that is the transaction that
I showed you that I prepared,

so how was it recorded the cash received?

We debit cash and we credit revenue
received in advance from 4800,

that was the original transaction,
it's not for this period,

that was before the 30th of June
and that's why we have in the balance,

on 30th June we have that amount.

Now in this period the adjusting entry
at the end of the period,

we need to include how much
we provide of services.

And we provide 3000 of this 4800.

So because we provide services,
now we can record the service revenue,

it's a credit service revenue,
and we decrease the obligation.

To put the things in context,
here we are in the month of June.

So in June the unadjusted trial balance
is for June.

I will go through the depreciation
but do not change them...

I will go through them,
but here... Ok.

This is the unadjusted...

I am clear now, excellent Ann.

This is the unadjusted trial balance
at 30th June.

Here means that before 30th June
we received the cash.

Now in the adjusting entry it means that
also during this period before 30th June

we provide 3000 of this 4800,
services provided, ok?

Does this answer your question George?

Ok, excellent, good.
So we can go through the next one.

I am here...

The next on is quite simple because
salaries, 6400 are owed on 30th June.

What does this mean?
Salaries owed means that

the employees worked,
so we already consumed these results.

The work of our employees and therefore
we should record a salaries expense.

But they are owed,
that means we have not paid them,

and that's why we did not record this as a
transaction like you learned last week.

We need to prepare the adjusting entry,
so we need to recall the pays,

salaries expense 6400 debit,
and a salaries payable

because it's owed at the end of the month
so it will be salaries expense

and salaries payable.

Here you have debit salaries expense 6400
credits salaries payable 6400, ok?

That I think is simple.
Then we have the number six.

Office equipment has a five year life
with no resale value,

and is being depreciated at
$1440 per month for 60 months.

In this description they are telling you
how much is the expense, ok?

But if it is not, if it is only they said
the office equipment has a five year life

with no resale value depreciated using
the straight line method,

you will learn this in another lecture
the depreciation for 60 months.

If we do not have the amounts, you can
just go to the unadjusted trial balance

look at the office equipment account,
86400.

If you divide this by 60,
you will have exactly 1440 per month, ok?

So that is the depreciation expense.

Yes, a couple of work, I will not go in
deep in this topic

because there is a whole topic
about depreciation.

Yeah, I will go why credit and...

Okay, you let me finish this part
and I will answer the question

of the previous one.

So we had this depreciation,
what does depreciation mean?

When we purchase an equipment like this,
office equipment,

and we pay a big amount of money,
in this case how much we paid

for this office equipment,
it was 86400, ok?

Do you think we can put as an expense
86400 in the first month?

Well, of course not because we will use
this equipment during 60 months,

and remember an expense is when we use
or consume resources.

This resource that is 86400, it will be
consumed or used during 60 months

so we need to calculate how much of this
we use in one month,

or in two months in this case.

In two months because it's from
1st of May till 30th June.

How much we use of this in two months,
ok? Two months.

So we divide this by 60,
we multiply by two,

and that will be 2880 because per month
is 1440 when you divide by 60,

you multiply by two because
it's two months

and now we can record the expense.

The name of this expense
is depreciation expense,

so we record debit depreciation expense.
What is the other account?

Well the other account will be to decrease
this account, office equipment,

so you can say well,
we credit office equipment.

That would be the case that we are doing
in all of these accounts,

but in the case of non-current assets
we use what we call a contra asset account

that means we keep separated
the decrease of this account

and the name of that account
is accumulated depreciation.

The effect is the same as you reduce
directly office equipment,

you credit office equipment
but in non-current assets like this,

this is a topic that we will explore
in detail,

we use another account and the name is
the accumulated depreciation.

It's an asset account
but with a credit end.

So the adjusting entry for this will be
depreciation expense debit 2880

and we credit accumulated depreciation
office equipment, ok, 2880.

Any question on this?

Ok, the last one.

The last one is number seven,
invoices representing a (INAUDIBLEL)

Ah, ok. Before we go to the seven
there is a question about the salaries

who asked me that question
about the salaries?

Omar who did, in the adjusted trial, ok.

I will try to answer the two questions.

First, Trina has a question, why
to credit 6400 in the transaction five?

Why to credit?
Isn't it debit when they pay 6400?

Well, remember Trina that we, in any
journal entry and also adjusting entry,

we have a debit side and a credit side.

The total debit should be always equal
to total credit.

So what is the debit and what is
the credit in the 6400 that you have here

in transaction five?

Salaries of 6400 are owed at that time,
30th June.

So we have an expense,
and the expense is a debit entry, ok?

The salaries expense it will be debit.

And we have a salaries payable because
they were not paid,

they are owed at 30th June.

So the salaries payable, the liability
will be the credit entry.

So your question is why credit?
Well, we credit the liability account,

that means salaries payable,
but we debit the salaries.

What happens when we pay them in
the next period?

When we pay the salaries we will
debit the salaries payable,

so we decrease this liability,
and we will credit cash, ok?

That is what happened in
the following period, not in this one.

Cash, ok. That is what happened
in the following period,

not in this one.
And Davlin...

Davlin you asked a question
about the depreciation?

Yes, depreciation, well, this is
the concept that will have in detail,

there is a whole lecture about
depreciation

with different methods of depreciation
but for now,

we only need to think in the concept
of depreciation, the general concept.

When we purchase an equipment
that lasts more than one accounting period

we cannot record as an expense
the cost of the equipment

because we will use the equipment
for a number of periods,

so we need to divide the cost of
the equipment

into the number of periods.

So we will have just one part of the cost
in each period,

and the easier way is just divide the cost
by the number of periods.

So in this case the total amount
divided by 60 months that we will use

this equipment, office equipment,
means that we will have an expense

of 1440 per month, and we call that,
that expense,

we call that depreciation expense, ok?

That is the name of this account,
depreciation expense.

What does that mean?

It means that that is the part of the
equipment that has been used or consumed

in one period.

And that's why we record that
as a debit for each month,

but here we have two months, ok?
Because from 1st May until 30th June

which is the time for this exercise,
two months,

it will be two multiplied by 1440,
which is 2880.

So we will record depreciation expense,
debit 2880.

What is the other account?

I mentioned that there is another account
but the name is accumulated depreciation,

so we will record a credit
in that account.

Ok, I'd asked how much would you deduct
from depreciation expense

in the adjusted...
Excellent Davlin, thank you.

How much would you deduct in the
adjusted trial balance?

I will go through that because we started with
the unadjusted trial balance.

We are doing the adjustments, and then
I will explain how we will adjust these

to the adjusted trial balance.

How we transform the unadjusted to the
adjusted trial balance.

Ok, yes Trina.

TRINA: Hello, with the salaries,

we already had 6400,
it means that expense increased,

that's why expense is debit 6400,
but with the liabilities,

it means that we decrease
the liabilities, is that right?

HERMAN: Yes when (INAUDIBLE)

TRINA: So if we decrease the... (CROSSTALK)

Sorry, if we decrease the liabilities,
it means it debits liabilities,

is that right?

HERMAN: Yes, when we pay that is
another transaction,

it's not the adjusting entry.

When we pay for the liability,
we will credit the liability

so we decrease the liability,
and we will debit cash.

So we decrease cash because we are paying
for that liability.

But that is another (CROSSTALK)

TRINA: yeah, I'm a bit confused because
we decrease the liabilities,

but when you put it credit 6400.

HERMAN: Yeah, well, that is the point.
Trina it's good that you asked

because we should not confuse two
different journal entries, ok?

The journal entry that we're talking
in number five here,

is an adjusting entry.

We have not paid anything
in this journal entry.

In this transaction, we only recognize
that the employees worked

during the months,
how much we owe them for this work, 6400.

We didn't pay anything.

In the transaction here it doesn't say
that we paid for that.

We owe this amount at 30th June.
So what do we record?

We record the expense,
that means debit salaries expense, 6400,

and we record the liability because
we owe them this amount,

so we credit salaries payable, 6400
and that's all.

That's all the adjusting entries.

Now in another day, next month,
we will pay for them.

In the payment that is another
journal entry, not this one,

when we pay for them what will we do?

We will debit the liability,
so we decrease the liability.

We will debit 6400, and we will pay,
that means we will credit cash.

When we credit cash we decrease
the cash account

because we are paying that amount
and that is another journal entry

for the next period.

Does this clarify the point Trina?
Good, excellent.

Ok, we are in the number seven,
the last one.

Invoices representing $8000 of services
performed during the month

have not been recorded as of 30th June,
so what does this mean?

We have provided services because
it says invoices representing

$8000 of services performed during that,
so we performed this service,

and we provided the services
for $8000

but they have not been recorded
so we need to record them them.

So we need to record
an accounts receivable

because it doesn't say anything there
that we received the money,

therefore it is an account receivable,
we will debit...

(CLEARS THROAT)
Sorry.

We will debit the account receivable
for $8000,

and we will credit the service revenue
because we earned from that service,

we already provided the service,
so we will credit service revenue.

So what we will have...

I will do that.

What we will have is the
last adjusting entry.

$8000 account receivable debit,
and credit $8000 service revenue.

So we've completed
all the adjusting entries.

Before we go to how we prepare the
adjusted trial balance,

any questions about the adjusting entries?
All good? Ok.

Excellent Jade, very good.
That's my purpose.

How we prepare the adjusted trial balance?

Before we prepare that,
remember these are journal entries,

so the name is adjusted journal entries,
they are journal entries,

so after you prepare the adjusting entries
what is the next step?

You need to post these entries
to the ledger.

The same as we did last week,
exactly Joshua,

we need to post them to the ledger,
all of them to adjust the balance

of each of these accounts.

We will not do that, ok?
You already learnt last week

how to post transactions from the journal
to the ledger,

and it's a very repetitive process
and it's the same in this case

so we will not go again through that part
we will assume that we already did that,

Ok, we post all of these
to the ledger accounts,

so the ledger accounts are updated.

But I will show you how to prepare
the adjusted trial balance,

using the worksheet, ok?

Using a worksheet, it has the advantage
that you can see

what is the unadjusted trial balance,
you can see the adjustments

and how to prepare the
adjusted trial balance,

how you can explain the difference
between the adjusted

and the unadjusted trial balance.

So here you have this worksheet.

In the worksheet what we do
is you copy here in this part, ok?

You copy the unadjusted trial balance.

Of course, total debit should
be equal to total credit.

You just copy that and then you go
through all the adjusting entries

and you put in the adjustment column,
this, I will do just the first two, ok?

Only the first two.

So in the first one,
what do we have here?

We debit 6400 in the supplies
expense account

and we credit 6400
in the supplies account,

so we look at this supplies
expense account.

This is the supplies expense account,
we debit 6400, so we just copy there

And the we go to the supplies account
this is the supplies account,

you debit this account, ok?
You just copy here in these two columns

what you have done
in the adjusting entries.

The second, we will do just the first two.
The second, what do we have?

1200 debit in electricity expense account
1200 credit electricity payable account.

So you copy that electricity
expense account,

1200 debit, you copy there
and then you look for electricity payable.

Electricity payable credit 1200,
and you continue with all of this.

The only thing that you need to be careful
is that sometimes,

one account appears more than one time
in the adjusting entries.

So if you look at the adjusting entries,
there is one account

that appears two times,
so service revenue.

You have here service revenue,
credit 3000,

and then you have here service revenue,
8000.

So the total amount that we will add
to service revenue is 11000.

That's why here service revenue
in the credit is 11000,

so its the sum of 3000+8000.

That you need to be careful because
we need to add the total amounts,

they've increased the credit
of this account.

Ok, so we complete these,
the adjustments.

We just copy all the adjusting entries,
debit or credit

in the corresponding accounts.

Well, it's a really (INAUDIBLE)
because very few accounts

you will have more than one entry.

In this case we have only service revenue
but you know the to not make a mistake

and I did that in the next exercise,
is this things.

Do not make a mistake, I will give you
a clue to not make a mistake.

Instead I've put here the total.

Every time you have an amount there
just put how much,

so you put here the 3000,
I will put in thousands

and then you simply add 8,
so every time you put the number there.

Then you know that it's 11000.

In this way you will not skip anything.

Ok, that is just a way to do
to not make that mistake.

How we prepare now the
adjusted trial balance.

The adjusted trial balance is the same
as the unadjusted trial balance

with all the adjustments.

So you can see for the cash accounts,
there are no adjustments.

Ok, no adjustments, so the adjusted
trial balance is the same

as the unadjusted trial balance.

Accounts receivable, the unadjusted
is 23 and 40.

The ajustment is debit 8000
so it directly increases the revenue

so the adjusted will be the sum
of all of them.

Prepaid insurance we have a debit,
9600.

The adjustment is a credit of 1600,
a credit decreases a debit,

it's the opposite, ok?
So it will be the difference

and there we adjusted this 8000.

The same for supplies,
we have 13600,

the adjustment is a credit,
therefore the credit decreases debit,

that will be 7200, ok?

And so on.

Office equipment there is no adjustment
accumulated depreciation

of office equipment,
there is nothing here,

because this is an account that was
in zero but we have an adjustment of

so the adjusted trial balance will be
a credit 2880.

So you can see to prepare the adjusted
trial balance is simple.

If we're working with the worksheet,
we just add or subtract the adjustment

depending on whether they are
on the same side or the opposite side.

If they are on the same side,
a debit increases a debit,

a credit increases a credit,
but in the opposite side

a credit will decrease a debit
or a debit will decrease a credit.

Any question?

So once you have these working...
Excellent Joshua,

Once you have the working,
the adjusted trial balance

you can just copy.
You have the list of...

You have the list of all this, ok?
The list of the accounts,

you have the balance,
the debit balance or the credit balance

of all of these accounts,
and you can just copy them

to have the adjusted trial balance
so if this is the adjusted trial balance

the list of the accounts,
what accounts have a debit balance

after the adjustments,
or credit balance, all of these accounts.

That's the complete exercise and
the adjusted trial balance.

Any question?

I think maybe we will use again
the four hours

because we still do not finish
the lecture,

we have the second exercise
of the lecture

and then we have the exercise
of the workshop

so definitely we are using
the consultation time of the

four hour to complete,
but at this point,

we are already one hour 40 minutes.

It's good for you to have a break
so you can just prepare your coffee.

No Natalia, I will answer that.
You prepare your coffee,

you're suffering, take a rest,
and we will meet in 10 minutes.

Before I go I will just answer
the question to Natalia.

Still accountants do this step manually?
No, Natalia, no.

I will talk about this when we come back
after 10 minutes

because I will talk about the assignment.
That will answer your question.

And Davlin, can you explain profit thing?

Yes I will do that in the next exercise,
need more exercise,

we will do four Abdul, today.

If we aren't late, pm,
no problem for me,

but if you have the strength
to still be there,

we'll be good...

We will...
We will do many exercises today,

but for now take a rest, relax.
I need to grab my coffee as well,

and 10 minutes, so it's 2.40.
At 2.50 we continue.

I will disconnect the microphone,
2.50 we continue, ok?

Ok, here we are again, more relaxed and
ready for another one and a half hours.

Before starting on the next exercise
I will just give you some information

about your first assignment.

The assignment that you will have
is a very practical assignment

and this will address one of the questions
about Natalia,

Natalia asked, still accountant do
these steps manually?

Well, accountants do not do this manually
but of course the need to understand

what the system does because if not,
the possibility of errors

could be very big.

When you enter a journal entry
you need to understand

what continues after that,
even the system is doing that

but you need to know how your ledger
is updated,

how the trial balance is prepared,
it's very important to do that.

That's why you learn to do this manually
even though then

the system will do this for you.

OK, but you need to be able to check
whether the system is doing well or not.

In this course you will have
the opportunity to deal with

one of the most commonly used
Accounting software,

it's a cloud accounting because
everything is in the cloud

and not in the computer of
the organization,

and that is Xero.

Xero is used by many small
and medium companies.

Not the very big ones because they
have their own systems,

but many small and medium companies
use Xero.

Accounting Pod is an organization
that facilitates the learning

of this various software.

Griffith University has an arrangement
with Accounting Pod

to provide this facilitation,
for learning Xero,

and we have set up the assignment
that you will have in this,

using this software.

So next Monday, 3rd August,
the module,

the practice module of Accounting Pod
will be open for you.

And it will be open practically
the whole month of August,

until the 27th of August,
that will be closed at 5.00 pm.

So what is the idea is that you do this.
You follow step by step

all the processes and you will learn
how to use this software,

so you will do what accountants do
in the practice, ok?

And this assessment, the assignment
we have two parts,

we have the practice model
that it's called,

that will be open next Monday,

and then after it is closed,
that means the 27th of August.

On the 1st of September we will open
the second part of this assessment

which is the Xero assessment.

That will be opened on the
1st of September,

and it will be closed on the 23rd
of September, 5.00 pm,

so at that point you need to finish
the second part.

Your marks will be based on what you do
in this task.

The marks are allocated...

The marks are allocated to the task
that you are doing.

Now, in the question by Jade,
what learning modules

will the practice on Xero cover?

What you need to know is just the basics
of the accounting cycle,

so to understand what is a journal entry,
what are the ledger accounts.

But the training that you will do,
you will see it's very...

Totally different to what we are doing
in the accounting period,

because you will do tasks related
to a software.

I will explain in a bit of detail
but next week, on Tuesday of next week,

you will do a task related to a software.

I will in a bit of detail, but next week,
on Tuesday next week

I will dedicate more time to explain
to you in more detail

what you have to do because at that point
you will have this already open, ok?

Now it's not there,
you cannot see this software yet.

There are three modules in each
assessment task,

the practice and the assessment.

Your marks for the assignment
will be the average of all these,

ok, the practice and the assessment.

You will have a rubric for this
so you will know exactly how

your marks will be allocated.

The system marks you, so it's not that
I will mark this.

For each task completed,
the system will mark you,

and you will have the marks
according to the task.

I will give you some guidelines
next week on that.

But in the first part, the practice set,
there are three modules, actually four,

but the important models
are modules two and three.

The module one is just a welcome for you
to have a welcome to the system,

there are no marks allocated there.

Module two is the basics,
and there are 20 marks allocated there.

There are very simple tasks that will
tell you how to work in Xero.

One of the tasks is for example to set up
an authentication in door,

so it's not related to accounting at all,
but is related to working with this...

with the system.

My suggestion would be to always
look at the question that you have

for each task and the possible answer,
and then look at the content.

Try to not answer the question immediately
but go through the content.

You will learn through the content,
not just answering the questions.

Try not to do what is...
You look at the question, possible answer,

and then you try to find the answer
in the content,

because you will not learn a lot.

The idea is that you learn how
to use Xero, this system, ok?

And to learn that it's good that you
go through the content

trying to learn what is this about?

And the next module,
the module three that is Xero,

in that module you will work in Xero.

So module two is just to prepare,
you will be prepared to work with Xero

but it's not yet the working withing Xero.

Module three yes,
you will have a number of tasks

following the instructions that
Accounting Pod will give you

to complete this task
and provide the answers.

So then the module four is just to wrap up
a couple of questions,

but not really important.

Module two and three are
the most important.

Now when you finish one module,
then you will have access to the next one

and so on,
so you need to go step by step.

In this sense, this is,
even though you need some knowledge

in accounting that you already have,
you don't need more than that

because it's different to learn how to
work with a software in accounting

than how to do accounting,
that is what you are doing now.

Then the assessment part is just the
application of all what you have learned

in the practice part,
and in a different case scenario.

So that is in general what you will
from next week,

there is time,
don't wait till the last two days.

For example, it opens 2nd August,
it will be closed 27th of August,

do not wait until the 25th of August
for all the task,

because you need time for that.

You need time to reflect on what
you're learning,

you need time to properly do the task
and go just a little bit

during the time this will be open.

It will not take a long time, ok?
it will not take a very long time,

probably you can do this in three
or four days, if you dedicate full time,

but that is not the best way to learn.

Yes, you will have marks Cecilia
in the practice part

and actually the total marks
that you will have is the average

weighted average of the practice part
and the assessment part.

I also considered to give marks
for the practice part

because in the practice part,
it will be easier for you,

but the intention is that you learn
how to use the software

and how to use this software
is in the practice part.

In the assessment part
you will apply all of this,

so there are marks allocated
in the practice part as well, yeah.

So this is just some information that
i want to give you in advance

and next week with this open,
I will show you the screens

and I can share screens
for you to do this.

Cecilia, is there any way we can practice
using the system without getting marks?

Yes, because you don't need to submit

but now you will see
it's very straightforward,

the system will tell you
exactly what to do,

so if you do well, you don't need
to do it again,

but try to do well.

Now there is some not in the practice part
but in the assessment part

there is feedback that you can receive
and also you can ask questions.

Now the specific question of the software
please do not ask me that way

but to the system, there is a box
that you will see next week,

that says 'leave us a message'.

You leave all the questions there
and they will answer you immediately.

If you have a problem with this,
of course you contact me

and I will deal with them, but they
answer quite quick all your questions.

Ok, now I have another message,

and this is another caption.

Who sent me a message about captioning?
They'll need the captioning.

Cassandra is that you?
Ok, I've added you.

Ok, so now we can continue
with the next exercise.