not that random
what are the 3 classifications that go in the balance sheet?
- Assets
- Liabilities
- Equity
how to calculate net income?
revenues - expenses = NI
what is the accounting equation?
- Assets = Liabilities + Equity
What would we record for the following transactions ?
Obtained Loan from bank for $1000
A) Cash +1000 (L) Loan Payable +1000
What are the 2 classifications that go in the income statement
- Revenues
- Expenses
- what are the 2 accounts that make up stockholders equity?
- common stock
- retained earnings
what are assets, liabilities, and stockholders equity?
- assets: what we own
- liabilities: what we owe
- equity: how much is left over for the owners after all debts are paid
What would we record for the following transactions ?
Purchased Inventory for $200 on account.
A) Inventory + 200 (L) Accounts Payable + 200
- What is the purpose of the balance sheet?
- It shows how much a company owes and owns at a period of time, or a snapshot of a company's financial position at a time.
what is the difference between accounts receivable and accounts payable?
- AR: what customers owe us
- AP: what we owe
where do these accounts appear on the balance sheet? Name the classification and if it's long/short term.
- Land
- Common Stock
- Accounts Payable
- Cash
- Bonds Payable
- Equipment
- Land: Long-term Asset
- Common Stock: Equity
- Accounts Payable: Current Liability
- Cash: Current Asset
- Bonds Payable: Long-term Liability
- Equipment: Long-term Asset
What would we record for the following transactions ?
Bought land for $360 cash.
(A) Cash - 360
(A) Land + 360
what is the purpose of an income statement?
- it shows how profitable a company is
- which expense is always recorded in parentheses?
accumulated depreciation
- Calculate net income, RE(end), and Assets
Common Stock 43
Dividends 0
Net Income ??
RE(beg) 104
RE(end) ??
Assets ??
Expenses 106
Liabilities 56
Revenues 137
- NI: 31
-ERE: 135
-ASSETS: 234
What would we record for the following transactions ?
Paid $45 towards the invoice for the inventory purchase last month (A/P)
(A) Cash - 45 (L) Accounts Payable - 45
- what makes something a current asset?
- what makes something a long term liability?
- gets used up in <1 year
- pay it off in >1 year
how to calculate ending retained earnings?
BRE + NI - Dividends = ERE
- What is the net income?
Accounts Payable 4650
Interest Expense 130
Accounts Receivable 580
Landing Fee Expense 3100
Aircraft Fuel Expense 8700
Notes Payable 6950
Cash 2970
Repair Expense 1200
Common Stock 1220
Retained Earning (end) 5780
Dividends 20
Salary Wage Expense 3280
Equipment 14370
Supplies 680
Income Tax Expense 260
Ticket Revenues 17100
NI = 430
What would we record for the following transactions ?
Paid $13 in dividends to shareholders.
(A) Cash - 13 (OE) Retained Earnings - 13