Accounting Math
If Liabilities are equal to $220,000 and Capital is equal to $42,000. What are assets?
$262,000
What does "on account" mean?
Buy now, pay later
If all else fails, draw this to help identify what happens in a transaction.
T-Chart
The normal balance is the side of the account that _______
increases
I borrow money from a friend. Assets increase. What else happens?
Liabilities increase
If Liabilities is equal to $24,000 and Assets are equal to $57,000. How much is Capital?
$33,000
What is it called when there are more than two accounts impacted within one transaction?
Compound entry
Receipts, Checks, Invoices, and Memos are examples of this.
You ______ before you post to the ledger.
Journalize
I pay cash for rent. What two accounts are effected? Give account names.
Cash and Rent Expense
Manicure Service Revenue = $2,000, Pedicure Service Revenue = $3,450, Utilities Expense = $850, Rent Expense = $1,400. What is net income/loss?
Net Income $3,200
In the closing entries, what account is the "buffer" account?
Capital
Partnership
What do you do at the end to show that everything is equal and/or that you are done with your work?
Double Underline or Double Rule
Rent increased for the next year. How will this impact my net income?
Decreases net income
Gross Pay = $4,500, Net Pay = $3,225. What is S.S. tax if 6.2% is taken from the employee's paycheck?
$279 in Social Security Tax
The EmployER holds onto taxes collected from their EmployEEs. Where does the money go at the end of the year?
To the Government
______ are listed second in journal entries and they are _______ to the right.
Credits; indented
The accounts that are closed at the end of the period to start fresh are _______ accounts.
Temporary
I sold a piece of equipment on account. How does this effect the dollar amount of assets in my business?
Beginning Captial = $10,000, Net Loss = $450, Additional Investments = $2,000 , Withdrawals = $3,500. What is ending capital?
Ending Capital = $8,050
Which financial statement MUST be completed prior to the Statement of Changes in Owner's Equity?
Income Statement
A business that buys completed products to sell to a customer. Think Target or Walmart.
Merchandising Business
You NEVER debit a revenue accounting unless you are doing this type of entry.
Closing
The owner withdrew cash for personal use. How does this impact capital?