Accounting Math
How is the accounting equation most often stated?
Assets = Liabilities + Owner's Equity
What is the account classification when a business owes money?
Liability
The procedure for transferring information from a journal entry to a ledger account
Posting
Accounts used to accumulate information from one fiscal period to the next
Permanent Accounts
How are employee regular earnings calculated?
Multiply regular hours times regular rate of pay
If Assets are $5000 and Liabilities are $1000, how much is Owner's Equity?
$4000
Assets = Liabilities + Owner's Equity
Owner's Equity = Assets - Liabilities
What is the account classification for account number 150?
Asset
Proving Cash
Accounts used to accumulate information until it is transferred to the owner's capital account
Temporary Accounts
How is net pay calculated?
Total Earnings minus Total Deductions
What is the formula for calculating net income ratio?
Net Income ÷ Total Sales
Then multiply by 100
What happens to owner's equity when an expense is paid?
It decreases
An amount of cash kept on hand and used for making small payments
Petty Cash
The series of activities included in recording financial information for a fiscal period
Accounting Cycle
Sold services on account; what is the debit and credit?
Debit Accounts Receivable; Credit Sales
If Total Sales are $4000 and Net Income is $1000, what is the net income ratio?
25%
($1000 ÷ $4000) X 100
What happens to owner's equity when revenue is earned?
It increases
A document that is prepared each time cash or checks are placed in a bank account
Deposit Slip
A trial balance prepared after the closing entries are posted
Post-Closing Trial Balance
If Supplies on the trial balance is $1000 and supplies on hand at the end of the month is $300, what is the adjustment amount?
$700
Calculate current capital if Capital balance is $4000, Net Income is $2000, and Drawing is $1000
$5000
Capital + Net Income - Drawing
$4000 + $2000 - $1000
What happens to the owner's capital account when the owner invests cash in the business?
It increases
A business form used to order a bank to pay cash from a bank account
Which accounts are needed to prepare a post-closing trial balance, all accounts or only accounts that have balances?
Only accounts that have balances
What is the debit and credit to journalize the adjusting entry for supplies?
Debit Supplies Expense; Credit Supplies