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ACCT 320 TUTORIAL_Overview

ACCT 320 TUTORIAL_Overview - ACCT 320 TUTORIAL OVERVIEW OF...

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ACCT 320 TUTORIAL OVERVIEW OF BASIC ACCOUNTING ENTRIES Overview: The double-entry system is used to process transactions. A general ledger is a collection of accounts used to keep track of increases and decreases in financial position elements. The table below provides the normal account balance for the elements of the financial statements: Assets Liabilities Paid-In Capital or R/E Debit Credit Debit Credit Debit Credit + - - + - + Revenues/Gains Expenses/Losses Debit Credit Debit Credit - + + - Summary of the Basic Financial Statements: BALANCE SHEET This statement contains the assets, liabilities, and owners’ equity accounts at a specific point in time. The date listed at the top of the balance sheet is a specific date, not a period of time like the other statements. The balance sheet is like a snapshot of those accounts at a certain date. Remember the basic accounting equation: Assets = Liabilities + Owners Equity. Sample Balance Sheet: Rock Chalk Shop Balance Sheet December, 31 20X1 Assets Liabilities Cash $45 Accounts Payable $20 Inventory 35 Notes Payable 30 Accounts Receivable 20 Owners Equity Common Stock 40 Retained Earnings 10 Total Assets 100 Total liabilities and OE 100
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INCOME STATEMENT Also known as the statements of earnings or statement of operations, the income statement summarizes all of the revenues and expenses during a particular period of time. Net income (or net loss) is found on this
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