Accounting Equation
This equals liabilities plus equity
What are Assets?
Resources a company owns or controls that are expected to yield future benefits.
What are assets?
The rule that requires financial statements to assume that the business will continue operating instead of being closed or sold.
What is the Going-concern assumption?
These type of entries affect both income statement and balance sheet accounts.
What are adjusting entries?
An account linked with another account that has an opposite normal balance and is subtracted from the balance of the related account.
What is a contra account?
The difference between a company's assets and its liabilities, or net assets.
What a company owes.
What are liabilities?
The following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported.
What is the expense recognition (Matching) principle?
The difference between the cost of an asset and the accumulated depreciation for that asset.
What is the book value? (or net value)
A credit is used to record a decrease in which of the following accounts?
Accounts Payable
Sales Revenue
Salaries Receivable
What is Salaries Receivable?
Identify the impact on the accounting equation:
The company purchases office supplies on credit.
Hint: two part answer
What is increases an asset & a liability?
Decreases in equity from costs of providing products or services to customers.
What are expenses?
The rule that requires revenue to be recognized when (1) goods or services are provided to customers and (2) at the amount expected to be received from the customer
What is the Revenue recognition principle?
The company has earned (but not recorded) $335 of interest revenue for the year ended December 31. The interest payment will be received 5 days after the year-end on January 5. This is the credit.
What is Interest Revenue for 335?
Full entry:
Interest Receivable 335
Interest Revenue 335
On 5/1, the company collected $2,100 cash for plumbing services billed on April 28. This is the journal entry for 5/1.
What is:
Cash 2,100
Accounts Receivable 2,100
?
Identify the impact on the accounting equation:
The company purchases a company car for cash.
What is increases an asset & decreases an asset?
Assets created by selling goods and services on credit.
What are Accounts Receivable (AR)?
A company’s list of all ledger accounts with an identification number assigned to each account.
What is a chart of accounts?
Salaries of $4,200 are earned by workers but not paid as of March 31. This is the debit.
What is Salaries Expense for $4,200?
Full entry:
Salaries Expense 4,200
Salaries Payable 4,200
S. Reyes invested $25,000 cash in Dewey Shell Company. This is the journal entry.
What is:
Cash 25,000
S. Reyes, Capital, 25,000
?
Identify the impact on the accounting equation:
The company provides plumbing services and sent an invoice for $200 to be received within 30 days.
What is increases an asset & an equity?
One asset out of the following that is not depreciated:
Buildings
Land
Cars
Equipment
What is Land?
Financial statements are typically prepared in this order.
What is Income statement, statement of owner's equity, balance sheet.?
The Supplies account had a $250 debit balance at the beginning of the year. During the year, $500 of supplies are purchased. A physical count of supplies at December 31 shows $435 of supplies available. This is the debit to record on December 31.
What is Supplies Expense for $315?
Full entry:
Supplies Expense 315
Supplies 315
The company paid $2,400 cash for a 24-month prepaid insurance policy on their building.
What is:
Prepaid Insurance 2,400
Cash 2,400
?