Corporations
These are owners of a corporation and elect the board of directors
Who are shareholders
This is cost of merchandise Delivered
What is Purchases + Transportation IN
This is the 1st closing entry for a closing entry for a corporation
Close all Credits to Income Summary
This account is credited when a business sells Merchandise for Cash
Sales
This journal is for buying Merchandise on account
What is Purchases Journal
This account represents the amount paid by investors for shares of stock
Capital stock
This is the formula for Net Sales
Sales
-Sales Discounts
- Sales Returns and Allowances
This is the 3rd closing entry
Close Income Summary to Retained Earnings
This account is credited when a business Purchases Merchandise on account
Accounts payable
What column of the Sales journal do you record a Sale?
Sales
This is the group that sets corporate policies and hires top managment
What is the board of directors
DAILY DOUBLE
WHAT IS NET INCOME
Net Purchases- $10,000
Expenses - $5000
Cost of Merch Sold- $1000
Net Sales- $8000
$2000
Net sales-$8000
-Cost of Merch Sold- $1000
=Gross Profit $7000
-Expenses $5000
=Net income
Net loss is recorded on the ___ side of Income Summary before closing it.
Debit
When a business buys Merchandise inventory and it is damaged and needs be sent back what account is affected and is it debit or credit?
Credit Purchase Returns and Allowances
What column should always be filled out on a Cash Payments Journal (include DR or CR)
Credit Cash in bank
This is the debit and credit for a company issuing stock
Debit: Cash in Bank
Credit: Capital Stock
Purchases $10000
Net Purchases - $10900
Purchases Returns and Allowances $600
Transportation In- $2000
What is Purchase Discounts?
$500
This is the 2nd step of the closing process for a corporation
Close Debits to the Income Summary
3/10 n/30
Total needs to be paid in 30 days but if paid in 10 days 3% discount
This journal is used to for selling merchandise for cash
Cash Receipts journal
This is where you get the Merchandise Inventory at the end of the period (year)
The Adjusted Trial Balance- Merchandise Inventory
Will take Balance Sheet
Recite the entire Purchases Formula
Purchases
+Transportation In
=Cost of Merch Delivered
-Purchase Discounts
-Purchase Returns and Allowances
=Net Purchases
+Beginning Inventory
=Cost of Merch Available
-Ending Inventory
=Cost of Merch Sold
Total in 1st closing entry was $4500
Total in 2nd closing entry was $3300
What is the full journal entry for the 3rd closing entry
Debit: Income Summary $3200
Credit Retained Earnings $3200
Do you think Dak should retire?
YES!!!
What journal should you used if you don't want to use a special journal
General Journal