Acct

Accounting equation:

Assets= liabilities + equity (permanent accts)

= revenue and expenses. (Temp accounts)

Forms of business ownership

Proprietorship/ one sole owner

Partnership/two owners

Corporation/more then 2 owners ‘

Assets= liabilities + stockholders equity

Notes payable come with interest/

Accounts payable

Liability when I owe someone money

Payable is a liability

Revenue haven’t earn it yet

What is categorize it?

Asset

Liability claims against the assets

Revenue source of your income

Creditors’ party to whom money is owed

Expenses, cost of generating revenues

Stockholders equity

Ownership claim on total assets

Referred to as residual equity

Paid in capital, retained earnings (corporation)

Revenues result from business activities entered into for the purpose of earning income

Common sources

Sales, fees, services, commission, interest, dividends etc,

Revenue increase equity

Expenses decrease equity

What’s on left most be on right on the accounting equation

Assets liability stockholders equity

Cash +accts receivable+ equip= accts payable + common stock + retained earnings

10,000 10,000

The only thing that shows on income statements is revenues and expenses

Cash means paid one asset going down –

When states on account it goes under accounts payable if something was bought or receivable if something was sold.

Generating business follows on revenue under the retained earnings on the formula.

DR abbreviation for debit

CR abbreviation for credit

Four financial statements:

Income statement: reports the revenues and expenses for a specific period of time.

Retained earnings statement; net income is needed to determine the ending balance in retained earnings.

Balance sheet: the ending balance in retained earnings is needed in preparing the balance sheet.

Statement of cash flow: cash flow comes from operating, investing, and financing.

Balance sheet is prepared as of specific date!...