Net Income
Revenues - Expenses
Revenues
Sales Revenue
Rent Revenue
Service Revenue
Interest Revenue
Retained Earnings
Net Income - Dividends
Stockholders Equity
Equity & Retained Earnings
Expenses
Cost of Goods Sold
Rent Expense
Salary Expense
Utilities Expense
Depreciation Expense
Interest Expense
Stockholder's Equity Accounts
Common Stock
Preferred Stock
Additional Paid-In Capial
Retained Earnings (Accumulated Deficit)
Assets =
Liabilities + Stockholder's Equity
Asset Accounts
Cash
Account Receivable
Inventories
Prepaid Expenses
Property, Plan and Equipment
Intangible Assets
Debits:
Expenses
Assets
Dividends
Credits:
Revenues
Liabilities
Stockholder's Equity
Balance Sheet Represents
Accounting Equation
Not major in Statement of CashFlows
Cash Flows from Customers
Statement of Stockholder's Equity
Common Stock
Retained Earnings
Dividends
Balance Sheet
dr Cash
dr Accounts receivable
dr supplies
dr prepaid rent
dr equipment
cr accumulated depreciation
cr accounts payable
cr unearned revenue
cr salaries payable
cr interest payable
cr utilities payable
cr notes payable
Income Statement
cr service revenue
dr supplies expense
dr rent expense
dr depreciation expense
dr salaries expense
dr utilities expense
dr interest expense
GAAP
Generally Accepted Accounting Principles
company pays stockholders a dividend
Decrease assets, decrease stockholder's equit
Pumpkin Inc. sold $500 in pumpkins to a customer on account on January 1. On January 11 Pumpkin collected the cash
no effect on accounting equation
assets up and down
Purchase office supplies on account
increase assets and increase liabilities
Providing services and receiving cash will
Increase assets and increase stockholders' equity.
Purchasing office equipment on account has what impact on the accounting equation
Increase assets, increase liabilities
Providing services to customers on account would affect the balances reported in which financial statement(s)
All of the financial statements would be affected
Which of the accounts are decreased on the debit side and increased on the credit side?
Liabilities, stockholders' equity, and revenues
Expenses normally carry a _______ balance and are shown in the _________
debit, income statement
Liabilities normally carry a _______ balance and are shown in the _________
credit, balance sheet
Which of the following accounts would normally have a debit balance and appear in the balance sheet?
accounts receivable
Assume that cash is paid for rent to cover the next year. The appropriate debit and credit are:
Debit Prepaid Rent, credit Cash.
Daniel Dino Restaurant owes workers' salaries of $15,000. This would be recorded as
Debit Salaries Expense, credit Salaries Payable.
Clement Company paid an account payable related to a previous utility bill of $1,000
Debit Accounts Payable $1,000, credit Cash $1,000.
Accounts Receivable account has a beginning balance of $10,000 and the company provides services of $50,000 on account during the month. The ending balance was $12,000. How much did the company receive from customers during the month?
48k
A trial balance can best be explained as a list of:
All accounts and their balances at a particular date.
The revenue recognition principle states that
Revenue should be recognized in the period earned
Making insurance payments in advance is an example of
prepaid expense
A list of all accounts and their balances after updating account balances for adjusting entries is referred to as
an adjusted trial balance
Temporary accounts:
revenues, expenses, dividends
Permanent accounts:
all accounts in balance sheet + retained earnings
Which of the following describes the purpose(s) of closing entries?
Reduce the balances of the temporary accounts to zero to prepare them for measuring activity in the next period.
The closing process includes which of the following?
Closing the balances of revenue, expense and dividend accounts to zero.
external transactions
firm conducts with separate economic entity
increases in liabilities and stockholder's equity are
credits
balance sheet
assets = liabilities + stockholder's equity
statement of stockholders equity
common stock + retained earnings
income statement
revenues-expenses = net income
closing entries
transfer all the balances of temporary accounts (revenues, expenses and dividends) to the balance of retained earnings account