General Accounting
What is the accounting equation?
Assets=Liabilities+Owner's Equity
Definition of a corporation
A type of business that sells stocks
A share of a company
Definition of a dividend
A percent of a corporation's profit that is given to shareholders
What is the journal entry when a company issues $10,000 of common stock
1. Cash- Debit for 10,000
2. Common stock- Credit for 10,000
What are the four categories inside of owner's equity
1. Capital
2. Drawing
3. Revenue
4. Expenses
What state are most corporations formed in?
Deleware
What are the two most common types of stock?
Common and preferred
What are the two main types of dividends?
1. Cash dividends
2. Stock dividends
What are the accounts used in a journal entry made on a cash dividends payment date?
1. Cash- Debit
2. Dividends payable- Credit
What is the normal balance for a contra equity account?
Debit
Who is in charge of a corporation?
Board of directors
What are the main differences between common and preferred stock?
Common- Less expensive but paid dividends last
Preferred- More expensive but paid dividends first
What are the two ways to earn money from a stock?
1. Buy low, sell high
2. Dividends
What is the journal entry when a corporation spends
$2,000,000 to open?
1. Organization expenses- Debit
2. Cash- Credit
What are our four financial statements?
1. Balance Sheet
2. Income Statement
3. Statement of Owner's Equity
4. Cash Flow Statement
What is the accounting equation for a corporation?
Assets= Liabilities + Stockholder's Equity
The lowest amount a corporation can legally sell their stock for
When a corporation owes money to stockholders but hasn't paid them yet, what account is used?
Dividends payable
What accounts are used for a cash dividend declaration journal entry?
1. Cash Dividends- Debit
2. Cash Dividends Payable Credit
What are the normal balances for accounting accounts?
Assets- Debit
Liability- Credit
Capital- Credit
Drawing- Debit
Revenue- Credit
Expense- Debit
It shows the amount of a money that a corporation has left over after they pay dividends to shareholders
What new account is used to show the money that a corporation earns from selling stocks?
Paid-in-capital
What are the three most important dividend dates called? Which one doesn't have a journal entry?
1. Date of declaration
2. Date of record (no journal entry)
3. Date of payment
What are the three accounts used in a stock dividend declaration journal entry
1. Stock Dividends
2. Stock Dividends Declaration
3. Paid-in-capital excess of par