Lecture 4 Balance Sheet 2

Lecture 4 Balance Sheet 2 - Balance Sheet(II ACCT 410...

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1 Balance Sheet (II) ACCT 410 Accounting for Non-Business Majors Fall 2008 Professor Jieying Zhang Leventhal School of Accounting University of Southern California Sept. 4, 2008
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2 Accounting Transactions What business transactions are recorded in the financial accounting system? Exchange of assets and liabilities with other entities As opposed to “executory” transactions Supplier: I will supply 5,000 units six months from now. Customer: I will pay when I receive the goods Exchange of promises How do transactions affect the accounting equation? The accounting identity is always maintained
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3 Joe’s Landscaping Service (1) Joe contributes $10,000 in cash Assets = Liabilities + Owners’ Equity Cash Paid-in Capital +$10,000 +$10,000
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4 Transactions and the Accounting Equation Cash + A/R + Equip. = L/P + P. Cap.+ R/E +10,000 +10,000  
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5 (2) The company borrows $3,000 from a bank Assets = Liabilities + Owners’ Equity Cash Loans Payable +$3,000 +$3,000
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6 Transactions and the Accounting Equation Cash + A/R + Equip. = L/P + P. Cap.+ R/E +10,000 +10,000 + 3,000 + 3,000  
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7 (3) Company purchases equipment for $5,000 cash Assets = L + OE Cash Equipment -$5,000 +$5,000
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Transactions and the Accounting Equation Cash + A/R + Equip. = L/P + P. Cap.+ R/E +10,000 +10,000 + 3,000 + 3,000 - 5,000 + 5,000  
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Lecture 4 Balance Sheet 2 - Balance Sheet(II ACCT 410...

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