Accounting Basics
This is the fundamental accounting equation
What is Assets=Liabilities + Owner's Equity?
This side of the ledger represents increases to assets
What is the debit side.
This is the counter debit or credit for Merchandise Inventory
What is Income Summary?
This financial statement reports a company's financial position at a specific point in time
What is the balance sheet?
This is the purpose of doing closing entries in the accounting cycle
What is closing entries transfer temporary account balances to the capital to prepare for the next accounting period
This ensures debits and credits in the general ledger are balanced
What is the the trial balance?
This is what happens with Debits and Credits when you purchase $10,000 of equipment with Cash
Debit: Equipment
Credit: Cash
This is what happens to Merchandise Inventory if you have a Credit in Income Summary
What is a Debit to Merchandise Inventory
This measures a companies profitability over a specific period of time
What is the income statement
These are the 3 types of accounts closed at the end of the accounting period
What are revenue, expense and withdrawal accounts?
We use these to record increases to owner's equity accounts
What are revenue sources?
The is what happens to debits and credits with you withdraw $1000 from the business
Debit: Withdrawal
Credit Cash in Bank
What is supplies expense
This financial statement notes an the owner's stake in the business and how it grows or declines
What is the statement of changes in owner's equity.
This is how you close revenue accounts.
Revenue accounts are debited to zero transferring their balances to the Income Summary and then Credited to the Capital
These are the 3 financial statements
What are the balance sheet, Income statement, Statement of Changes in Owner's Equity?
This is what happens to debits and credits when a company receives $1000 payment for Lawn Care services rendered
Debit Cash $1000
Credit Lawn Care Revenue $1000
This is the adjustment when you perform an inventory and you realize you have $2000 less supplies at the end of a period
Debit Supplies Expense $2000
Credit Supplies $2000
This is how the balance sheet and the Accounting equation correspond
What is the balance sheet presents assets on one side, which are financed by liabilities and equity on the other side, ensuring that the equation remains balanced.
This is what you do to close a withdrawals
Credit the withdrawals account.
This is the step in the accounting cycle after Jornalizing
What is Post to general ledger
This is what happens with Debits and Credits:
When you Sell $10,000 of Merchandise Inventory, $5,000 cash and $5,000 on accounts
Debit Cash $5000
Debit Accounts Receivable $5000
Credit Merchandise Inventory $10000
This is the adjustment for paying down $100 of prepaid insurance
Debit Insurance Expense
Credit: Prepaid Insurance
This is where
Assets
Income Summary
and Expenses on the worksheet
Where are
Balance sheet
Income Statement
and Income Statement
Calculate overtime pay for an employee who earns $15 per hour and works 48 hours in a week.
Regular pay: 40 hours * $15/hour = $600 Overtime pay: 8 hours * $15/hour * 1.5 = $180 Total pay: $600 + $180 = $780