Journal Entries
Sold services on account to Sandoval Company, $425.00
Debit: AR - Sandoval Company, $425
Credit: Sales, $425
Reporting income when earned and expenses when incurred.
A. Cash Basis of Accounting
B. Accrual Accounting
C. Balance Sheet
D. Income Statement
B. Accrual Accounting
If equity is $79,000 and liabilities are $50,000, then assets equal _________
$129,000
Which of the following is not classified as a liability? What is the correct account classification?
Accounts Payable
Accounts Receivable
Notes Payable
Wages Payable
Accounts Receivable - Asset
A company purchases supplies with cash, $5,600. What is the journal entry?
Debit: Supplies, $5,600
Credit: Cash, $5,600
Which financial statement is as of a specific date and shows assets, liabilities, and owner's equity?
Balance Sheet
What 2 balances does a bank reconciliation compare?
internal accounting records and an external bank statement
Expenses increase on the __________ side
Debit
Paid cash to owner as withdrawal of equity, $1,800.00
Debit: Drawing, $1800
Credit: Cash , $1800
What does the income statement show?
A financial statement showing the revenue and expenses for a fiscal period.
Which Financial Statement is this?
Balance Sheet
Income Statement
Statement of Cash Flows
Income Statement
Alex Smith, capital is a(n) ____________ (asset, liability, equity, revenue, expense) account that increases on the __________ (debit/credit) side
Equity
Credit
Paid cash for heating bill, $333.00
Debit: Utilities Expense, $333
Credit: Cash, $333
Note whether the account is an asset, liability, or equity account
Cash
Capital
Accounts Payable
Drawing
Accounts Receivable
Cash - Asset
Capital - Equity
Accounts Payable - Liability
Drawing - Equity
Accounts Receivable - Asset
Received notice from the bank of a dishonored check from Allie's Diner, $200.00, plus $30.00 fee; total, $230.00. Record the Journal Entry.
Debit: Accounts Receivable - Allie's Diner, $230
Credit: Cash, $230
How is net income calculated?
Revenue - Expenses
Fill in the Blanks
Accounts Payable a(n) _______ (assets, liabilities, equity, revenue, expense) account that decreases on the _________ (debit, credit) side
liabilities
debit
Why are adjusting entries necessary at the end of an accounting period?
To ensure financial statements accurately reflect a company's true financial health by matching revenues with the expenses that generated them, following the accrual basis of accounting
What is the next step after a financial transaction is journalized in the general journal?
It should be posted to the general ledger.
Explain what is happening when the owner's capital account increases?