It's Just Business
A business owned by one or more people & functions as its own legal entity
First step in the accounting cycle
Analyze Transactions
Any resource or item of economic value owned or controlled by an individual, corporation, or government
asset
Receiving $100 cash for providing a service would result in what accounts being affected and are they debited or credited.
Cash- Debit
Service Revenue- Credit
AI Inc. has $11,000 net income in its current year, pays out $1,000 for dividends and has a beginning retained earnings balance of $100,000. What is AI Inc.’s ending retained earnings?
110,000
The systematic process of recording, organizing, summarizing, and reporting financial transactions for a business or organization
Accounting
Once journal entries are recorded, you have to do what to make them official
post them to the ledger
Liabilities are often labeled as what in their account titles
Payables
Your business purchases $500 of office supplies on account (to be paid next month). What accounts are affected and how?
Supplies- Debit
Accounts Payable- Credit
How interest income is handled on a bank reconciliation?
Adjustment made to company book balance
Describes the scenario of a company earning more than the amount the company spends?
Profit
After the trial balance and before closing- any entries that are made are considered what type of entry?
Adjustment entries
What is the accounting equation
Assets = Liabilities + Stockholder's Equity
The company pays $1,200 for rent using cash. Which accounts are affected and how?
Rent Expense- Debit
Cash control process that prevents employee "borrowing" or false accusations of theft by separating duties amongst two people
dual control
Types of Accounting that produces information for the company use for decision making
Management Accounting
What is the 1st financial statement created at the end of an accounting cycle?
Income Statement
Name a type of stockholder's equity account
Capital, Retained Earnings, Common Stock, etc
An owner invests an additional $5,000 cash into their lawn care business. Which accounts are affected and how
Cash- Debit
Owner's Equity (Capital)- Credit
A common adjustment made to a trial balance which distributes the cost of a long-term asset over its useful life?
Depreciation
Name 2 of the GAAP princples.
cost, reliability, disclosure, matching, going-concern
What items will you find on an income statement?
(2 parts)Account title for a purchase transaction that was completed for a service not yet completed.
What kind of transaction is it?
Unearned Service Revenue; Liability
Increasing Dividends, Expense, and Assets accounts would result in a debit or credit
Debit
A firm has total assets of 21,000 and total liabilities of 11,000. Using the basic accounting equation, what is the balance of total owner's equity?
10,000
Increasing Liabilities, Equity, and Revenue accounts would result in a debit or credit
Credit