Financial Statement
Reports a company's assets, liabilities, and shareholder equity at a specific point in time.
Balance Sheet
Received advance payment for 3 months worth of rent.
Debit: Cash
Credit: Unearned revenue
Debit: Supplies Expense $400.00
Credit: Supplies $400.00
Cash received in advance for goods/service
Unearned Revenue
One asset goes up, another asset goes down.
Debit: Cash
Credit: A/R
The report shows a company's financial performance over a period of time.
Income Statement
Purchased equipment on account.
Debit: Equipment
Credit: Accounts payable
January 1, received $1,000 in advance payments for 5 months' rent. End of January 31, what is the adjusting entry?
Debit: Unearned revenue - Rent $200.00
Credit: Service Revenue $200.00
The latest items purchased is the first to be sold.
LIFO
Debit: Supplies/Inventory/Equipment
Credit: A/P
The report shows the changes in the capital balance of a business over a reporting period.
The company pays its employee weekly on a Friday. December 30 is a Tuesday, the company accrued employee salary expenses but has not paid. January 2 is a Friday and the company expects to pay its employee.
Debit: Salary Expense
Credit: Salary Payable
Credit Cash
On March 1, purchased a $10,000 truck with a $2,000 salvage value at the end of its 5 years useful life. Dec 31, what is the adjusting entry?
Debit: Depreciation Expense $1,333.00
Credit: Accu. Depreciation Expense $1,333.00
The three methods to account for bad debts under the allowance methods.
% of credit sales
% of Receivables
Aging of Receivables
Liability goes down, Owner Equity goes up
Debit: Unearned Revenue
Credit: Revenue
Statement of Cashflows
Sold inventory on account under the Perpetual inventory system.
Debit: Account Receivable
Credit: Sales Revenue
Debit: COGS
Credit: Inventory
December 15, paid $600 in advance for 6 months worth of insurance. December 31, what is the adjusting entry. (Round to the nearest dollar.)
Debit: Insurance Expense $52.00
Credit: Prepaid Insurance $52.00
To avoid writing checks for small amounts, a company set up this account called?
Petty Cash
Asset goes down, Liabilities goes down
Debit: A/P
Credit: Cash
Revenue - Expense = Net Income/Loss
Income Statement
Receive investment by owner
Credit: Owners' Contribution or Common stock
February 1st, A company has a $6,000 loan from a bank at 5% interest. February 28, what is the adjusting entry to accrued the interest expense?
Debit: Interest Expense $25.00
Credit: Interest Payable $25.00
Expense of buying and preparing merchandise is called?
Cost of Goods Sold
Asset goes up, Owner Equity goes up
Debit: Cash
Credit: Common stock/owners contribution