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ACCOUNTING 01/06/09

Class notes/ definitions / terms 01/06/09
STUDY
PLAY
Accounting
Recording, classifying, & summarizing financial information, and interpreting the results.
Proprietor
Owner of a business
Accounts
Assets, liabilities & owners equity are comprised of individual accounts like cash, loans payable, and capital.
Assets
Property that a business owns
Investment
Assets used in the business that were provided by the owner.
Liabilities
Debts owned by a business
Accounts Payable
Short term debts, owed for credit purposes
Creditors
Companies and individuals to whom money is owed
Owners Equity
Financial interest of an owner in a business
Accounting Equation
Assets = Liabilities + Owners Equity
Balance Sheet
Itemized lists of assets, liabilities and owners equity showing financial position of a business.
Business transaction
Business activities involving the exchange of 1 item of value for another.
debit
increasing asset account
credit
decreasing asset account
debit
decreasing liability / owners equity account
credit
increasing liability / owners equity account
debit
when you receive cash you...
credit
when you pay out cash you...
debit
when you pay an expense you _____ the specific expense account
Credit
when you make a sale or receive money, you ______ the revenue /fees / sales account
assets
equipment
assets
building
Assets
Accounts receivables
Assets
Land
Assets
Supplies
Assets
Building
Assets
Cash
Liabilities
Accounts Payable
Liabilities
Loans Payable
Liabilities
Mortgage Payable
Liabilities
Notes payable
Owners Equity
Capital Account
Owners Equity
Revenues / Sales / Fees
debit cash
Donation / Investment ( what would you do to assets side?)
credit capital acct
Donation / invesment (What would you do to capital account?)
FOB SHIPPING POINT
Receiver must pay shipping costs
FOB Destination
Supllier / Sender must pay shipping costs
statement of owners equity
intiial capital + additional capital (+ or -) net profit or net loss - withdrawals account
net profit
revenue exceeds expenses
Net loss
expenses exceed revenue
debit
addition of monies to a contra account
debit
addition of merchandise to be sold results in a _____ to the related merchandise exp acct
credit
a discount for purchase would result in a _______ to the purchases discount account
temporary expenses
Accounts closed at the end of each period (ex: revenue., expense, drawing acct)