Unformatted text preview: Hysterical cost principle –value must be maintained Account receivable –what someone owes you Liabilities –what someone owes someone else Accounting Equation Assets = Liabilities + SHE Stock holders equity (Equities) I.e. 20,000 = 5,000 + 15,000 Assets: cash, auto, inventory, account receivable, supplies, land, building, equipment Liabilities: account payables, unearned revenues, wages payable, rent, bills SHE: common stock, additional paid-in capital, revenues, expenses, dividends Effect of transactions on the accounting equation When an asset decreases then:-another asset increases-a liability decreases-SHE decreases When an asset increases:-another asset decreases-a liability increases-SHE increases...
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This note was uploaded on 06/17/2008 for the course ACCT 101 taught by Professor Iforget during the Spring '08 term at Philadelphia.
- Spring '08