buildings
the costs of office building, manufacturing plant, and the like
accrued liabilities
liability for an expense you have not yet paid
-interest payable and salary payable are accrued liability accounts for most companies
-income tax payable is another accured liability
common stock
shows owners' investment in the corporation
retained earnings
shows cumulative net income earned by a company, over the company's lifetime, minus its cumulative net losses and dividends
dividends
are optional.
-decided and declared by the board of directors
-after profitable operations, a board may, (or may not) declare and pay a cash dividend
revenues
increase in stockholders' equity from delivering goods or services to customers is revenue
-a company uses as many revenue accounts as needed
name 2 things that (1) increase apple stockholders' equity and (2) decrease apple's stockholders' equity
(1) sale of stock and net income (revenue greater than expenses)
(2) dividends and net loss (expenses greater than revenue)
income statement
data appear as revenues and expenses under "Retained Earnings"
-revenues increase RE
-expenses decrease RE
balance sheet
data are composed of the ending balances of the assets, liabilities and stockholders' equities shown at the bottom of the exhibit
statement of retained earnings
repeats net income (or net loss) from the income statement
-dividends are subtracted
-ending retained earnings is the final result
statement of cash flows
data is aligned under the Cash account. Cash receipts increase cash, and cash payments decrease cash
double-entry accounting
records dual effects on the entity (since every transaction involves giving something and receiving something)
t-account
debit = left side
credit = right side
every business transaction involves
both a debit and a credit
-the debit side of an account shows what u received
-the credit side shows what you gave
decreases in assets are recorded on which side
right
increases in assets are recorded on which side
left
balance
the amount remaining in an account
stockholders' equity also includes
revenues and expenses
-revenues are increases in stockholders' equity that result from delivering goods or services to customers
-expenses are decreases in stockholders' equity due to the cost of operating the business
a debit ..... an asset account
increases
a credit ..... an asset
decreases
a credit ..... a liability account
increases
a debit ..... a liability
decreases
dividends and expenses in reference to equity accounts
equity accounts increased by a debit. dividends and expense accounts are negative (or contra) equity accounts
journalizing process
1) specify each account affected by the transaction and classify each account by type (asset, liability, stockholders' equity, revenue, or expense)
2) determine whether each account is increased or decreased by the transaction. use the rules of debit and
journal
a chronological record of all company transactions listed by date
-journal DOES NOT indicate how much cash or accounts receivable the business has
ledger
grouping of all the t-accounts, with their balances
keeping the books" refers to...
accounts in the ledger
posting
when data must be copied to the ledger