Web Review Notes - Accounting in Business Accounting in...

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Unformatted text preview: Accounting in Business Accounting in Business Chapter 1 Chapter 1 Balance Sheet Balance Sheet Income Statement Income Statement Scott Company Statement of Owner's Equity For Month Ended December 31, 2007 Capital, December 1, 2007- $ Plus: Investments by Owner 20,000 $ Net Income 2,200 22,200 22,200 Less: Withdrawals by owner 500 Capital, December 31, 2007 21,700 $ Statement of Owners Equity Statement of Owners Equity Statement of Cash Flows Statement of Cash Flows Financial Statement Relationships Financial Statement Relationships Scott Company Statement of Owner's Equity For Month Ended December 31, 2007 Capital, December 1, 2007- $ Plus: Investments by Owner 20,000 $ Net Income 2,200 22,200 22,200 Less: Withdrawals by owner 500 Capital, December 31, 2007 21,700 $ Analyzing and Recording Analyzing and Recording Transactions Transactions Chapter 2 Chapter 2 Analyzing and Recording Process Analyzing and Recording Process 1. Analyze each transaction and event from source documents Apply double-entry accounting 2. Record relevant transactions and events in a journal 3. Post journal information to ledger accounts T-account versus formal ledger account 4. Prepare and analyze the trial balance 5. Prepare financial statements Transaction Analysis Transaction Analysis 1. J. Scott invests $20,000 cash to start the business. 1. Purchased supplies paying $1,000 cash. 1. Purchased equipment for $15,000 cash 1. Purchased Supplies of $200 and Equipment of $1,000 on account. 1. Borrowed $4,000 from 1st American Bank. 1. Provided consulting services receiving $3,000 cash. 1. Paid salaries of $800 to employees. 1. A withdrawal of $500 is made by the owner. Source Documents Source Documents (and double-entry accounting) (and double-entry accounting) J. Scott #527 1 University Station Pay to the order of Scott Company $20,000 twenty thousand and no/100 ------------------------------------------ J. Scott Acct Name: Scott Company Item Amount Supplies $1,000 Mega-Mart "Too Much is Not Enough" Acct Name: Scott Company Item Amount Supplies $1,000 Mega-Mart "Too Much is Not Enough" Acct Name: Scott Company Item Amount Supplies $1,000 Mega-Mart "Too Much is Not Enough" Assets Liabilities Equity = + Journal Entries Journal Entries Date Description PR Deb it Cred it Cash 20 ,000 Owner Cap ital 20 ,000 Ledger Accounts Ledger Accounts A T-account represents a ledger account and is a tool used to understand the effects of one or more transactions. Cash Credit side Debit side ASSETS Debit for Increase Credit for Decrease EQUITY Debit for Decrease Credit for Increase LIABILITIES Debit for Decrease Credit for Increase = + Revenues Expenses Owner Investments Owner Withdrawals Debits and Credits Transaction Analysis Transaction Analysis 1. J. Scott invests $20,000 cash to start the business....
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Web Review Notes - Accounting in Business Accounting in...

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