Thursday Accounting

Accounting Equation

100

What is the accounting Equation?

Assets= Liabilities + Owner's Equity 

200

The resources owned by a business are its

assets.

300

The rights of creditors are the debts of the business and are

Liabilities 

400

•John Joos is the owner and operator of You’re A Star, a motivational consulting business. At the end of its accounting period, December 31, 20Y8, You’re A Star has assets of $800,000 and liabilities of $350,000. Using the accounting equation, determine the Owner’s equity as of December 31, 20Y8.

Owner's Equity: 450,000 $

500

•John Joos is the owner and operator of You’re A Star, a motivational consulting business. At the end of its accounting period, December 31, 20Y8, You’re A Star has assets of $800,000 and liabilities of $350,000. Using the accounting equation, determine the following amounts:

Owner’s equity as of December 31, 20Y9, assuming that assets increased by $130,000 and liabilities decreased by $25,000 during 20Y9.

Owner's Equity: 605,000$

Information

100

T/F: •The objective of most businesses is to earn a profit.

True

200

Provide 2 examples of an external user of accounting information 

government, banks, investors

300

•The area of accounting that provides external users with information is called_____.

financial accounting.

400

What does GAAP stand for?

Generally Accepted Accounting Principles

500

Name 2 out of the 4 Financial statements 

1- Income Statement 

2- Balance Statement 

3- Owner's Equity Statement

4- Cash Flow Statement

Transactions

100

On November 10, 20Y3, NetSolutions purchased supplies for $1,350 and agreed to pay the supplier in the near future.

Supplies (Asset) =increased by $1,350

Account Payable (Liability) = increased by $1,350

200

____which is an asset, is a claim against a customer.

Account Receivable 

300

Revenue from providing services is recorded as

 fees earned.

400

•On November 18, 20Y3, NetSolutions received cash of $7,500 for providing services to customers.

Cash (Asset) Increased by $7,500 

Revenue (increases OE) increased by $7,500

500

Billed customers for delivery services on account, $11,250.

AR (Asset) increases by $11,250

Revenue (Increases OE) increased by $11,250