notes for lecture #4

notes for lecture #4 - #12 Cash Revenue Cash Sale *writing...

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Lecture #4, Page 1 Financial Accounting Lecture #4 September 9, 2008 Notes Equity is a residual claim – what is leftover PPE – property, plant, and equipment - Revenue increase net income – net income(revenue – expenses) increases retained earnings – retained earnings increases equity - Operating expense is any expense needed for operation - Expenses affect net income which affects retained earning which effects equity - On balance sheet, we use retained earnings…which is net income on income statement Payable, receivable, expense, revenue all key to writing on different statements Costs of goods sold is an operating expense Pwpt: #3 Debits = credits is equivalent to balancing the balance sheet equation
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Unformatted text preview: #12 Cash Revenue Cash Sale *writing cash sale to describe debit/credit is optional and not necessary #15-if you have multiple debits or credits, you list all debits first, and then all credits!!!- debits and credits must always balance!!!! #18 Remember – cost of goods sold is an expense account! Note: remember: crediting inventory, means DECREASE #20 You paid for it already, but do not recognize the expense until you enjoy the benefit of what you paid for Note: prepaid expense (prepaid advertising) is an ASSET! #21 At the end of every month, make sure you close out all accounts…some transactions are hidden and can be more easily forgotten about!...
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This note was uploaded on 09/10/2008 for the course BUS 210 taught by Professor Sevier during the Spring '08 term at Emory.

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