External Transactions
Purchased supplies for $3,000 on account. Record the journal entry:
Debit Supplies for 3,000 and Credit Accounts Payable for 3,000.
On May 1, 2020, company paid 60,000 for a 2 year rental agreement, in advance. What do we record on Dec 31:
Debit Rent Expense 20,000 and Credit Prepaid Rent for 20,000
What is the Accounting Equation?
Assets=Liabilities + Stockholder's Equity
Creditors' Claims to a corporations resources is called?
Liability
What type of account is Common Stock? (A,L,SE,R,E)
Stockholders' Equity
Collected $2,800 from customers on account. Record the journal entry:
Company purchased equipment for 100,000, on January 1,2020.The asset depreciates 10,000 per year. What would you record on Dec 31:
Debit Depreciation Expense for 10,000 and Credit Accumulated Depreciation for 10,000.
What is the formula for net income?
Net Income= Revenues - Expenses
What does the term credit mean?
Right side
Prepaid rent is found on what financial statement? (IS, BS)
Balance sheet
Paid the employees salaries of $30,000 for the month. Record the journal entry:
Debit salaries expense for 30,000, and credit cash for 30,000.
The company had $4,000 of supplies on Jan 1. During the year they purchased $6,000 worth of supplies. No entries were made as the supplies were used during the year. On Dec 31, the physical showed only $3,000 of supplies on hand. What would you record on Dec 31:
Debit Supplies Expense for 7,000, and credit Supplies for 7,000.
What accounts are closed at the end of the period?
Revenues, Expenses, and Dividends
What form of business is legally separate from the owners?
Corporation
Interest Receivable is increased with a debit or a credit?
Debit
Received $9,000 cash for services to be provided in the future. Record the journal entry:
Debit cash for 9,000, and Credit deferred revenue for 9,000.
The Company received 21,000 as a payment in advance for services to be performed over 6-months starting November 1,2020. What would be recorded on Dec 31:
Debit Deferred Revenue for 7,000, and Credit Service Revenue for 7,000.
When closing your revenue accounts, what do you debit?
All your revenues
A list of all account names used to record transactions of a company are referred to as the:
Chart of accounts
Are Deferred Revenues Temporary or Permanent Accounts?
Permanent
Purchased Equipment for $40,000, paying $10,000 down and signed a note for the remaining $30,000. Record the Journal Entry:
Debit Equipment for 40,000, Credit Cash for 10,000, and Credit Notes Payable for 30,000
On Feb 1, Company 1 borrowed 50,000 from company 2 with 3% interest per year. What would you record on Dec 31:
Debit Interest Expense for 1,375, and Credit Interest Payable for 1,375
How would you journalize the closing entry for expenses?
Debit Retained Earnings, and Credit all of the expense accounts
What principle states that revenues should be recognized in the period that the obligation was completed?
Revenue Recognition Principle
What account is insurance expense, and is it a Temporary or permanent account?
Temporary Expense Account