Accounting Transactions 1
Paid cash for advertising in a professional magazine...DR/CR
DR: Advertising Expense
CR: Cash
Received a sales on account for a service performed by the business.
DR: A/R
CR: Fees Earned
BRS helps us in rectifying _____ and ____books
cash book and pass book
A financial statement that reports assets, liabilities, and owner's equity on a specific date
balance sheet
All the monetary transections are recorded in financial statements
Measurement Principle
Sold services on account...DR/CR
DR: Accounts Receivable
CR: Sales
Bought supplies on account...Dr/Cr
DR: Supplies
CR: Accounts Payable
Cheque deposited but not collected
(from CB to PB)
Negative
An increase in equity resulting from the sale of goods or services
revenue
Keep personal transactions separate from business
Business Entity
Paid cash on account...DR/CR
DR: Accounts Payable
CR: Cash
Received cash on account...DR/CR
DR: Cash
CR: Accounts Receivable
Direct deposit by customer
(CB to PB)
Positive
A proof of the equality of debits and credits in a general ledger
trial balance
The business has no intention of closing.
Going Concern Principle
Paid cash to owner for personal use...DR/CR
DR: Drawing
CR: Cash
Recorded bank service charge...DR/CR
DR: Miscellaneous Expense
CR: Cash
Interest credited by bank
(CB to PB)
Positive
A mathematical symbol you will never see on a Financial Statement (like profit and loss account).
A negative sign
A business's accounting be recorded on the basis of clear, verifiable evidence - like source documents.
The Objectivity Principle
Received a partial cash refund for the Utility expense that was overpaid...DR/CR
DR: Cash
CR: Utilities Expense
Purchased office furniture from Office Outfitters on account.
DR: Office Furniture
CR: A/R
Payment side of Cash Book overcasted by $200
(CB to PB)
Add 200
The date terminology that is used under the heading of balance sheet
"as on ----"
Accounting will take place over a specific Fiscal Period
Time Period Concept