Terms in this set (36)
Source information for accounting entires that can be either paper or electronic
Record within a accounting system in which increases and decreases are entered and stored in specific asset, liability, equity, revenue, or expense
Owned or controlled by a company; expected future benefits
Types of Assets Accounts
cash, accounts receivable, note receivable, prepaid accounts, supplies account, equipment account, building & land account
represents a companies cash balance
held by seller and promises payment from customers to sellers
note, written to say they will have the money by this date
prepayments for future expenses
assets until they are used then they are an expense
asset until used
claims against assets
Types of Liability Accounts
account payable, note payable, unearned revenue, accrued liabilities
implied promises to pay later
liability thats settled in the future when a company delivers product or service
amounts owed and not paid
Types of Equity Accounts
owner investments, owner withdrawals, revenue accounts, expense accounts
invested cash in a company
withdrawals assets for personal use, decreases both company assets and total equity
sales, commissions, rent, revenue
advertising, supplies, salaries
Double Entry accounting
each transaction affects at least 2 accounts and one is debit for other credit
Analyzing Transactions 1.
identify the transactions
Analyzing Transactions 2.
analyze the transactions using accepting equation
Analyzing Transactions 3.
record the transaction in journal applying double entry
Analyzing Transactions 4.
post the entry
list of accounts and their balances at that point in time total debt balances = total credit balances
Preparing a Trial Balance 1.
list each account title and its amount in the trial balance
Preparing a Trial Balance 2.
compute the total of debit balances and the total of credit balances
Preparing a Trial Balance 3.
verify total debit balances equal total credit balances
companies revenues and expenses with net income or loss over a period of time
Net Income =
Revenues - Expenses
State of Owners Equity
explains changes in equity from net income and from any owner investment and withdrawals over a period of time
Ending owners equity =
Beginning owners equity + net income - owner withdrawals
Assets = Liabilities + Owners Equity
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