Preparing Accounting Records

Preparing Accounting Records - THE ACCOUNTING CYCLE...

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THE ACCOUNTING CYCLE Preparing Accounting Records
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LESSON THREE
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DEBITS AND CREDITS z The T – Account gives us a picture of the transactions recorded in an account. _____________________ Debit | Credit Dr | Cr
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ASSETS _________Assets___________ Debit | Credit Dr | Cr + | -
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ASSET TRANSACTION z Your company purchased a $40,000 truck for cash.
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USING ASSET ACCOUNTS ___Cash___ __ Dr | Cr + | - __Truck__ | 40000 Dr | Cr + | - 40000 |
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THE ACCOUNTING EQUATION Assets__ = Liabilities Dr | Cr Dr | Cr + - - + Stockholders’ Equity Dr | Cr -+
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LIABILITIES __Liabilities____ Dr | Cr -| +
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ASSET AND LIABILITY TRANSACTION A-Your company bought $400 in supplies on account. B-They then paid the bill for the supplies.
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ASSET AND LIABILITY ACCOUNTS __Cash___ Dr | Cr Supplies + | - Dr | Cr | + | - Accounts Payable A) 400 | Dr | Cr - | + | 400 A)
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ASSET AND LIABILITY ACCOUNTS __Cash___ Dr | Cr Supplies + | - Dr | Cr | 400 (B + | - Accounts Payable A) 400| Dr | Cr - | + B) 400 | 400 A)
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THE ACCOUNTING EQUATION Assets__ = Liabilities Dr | Cr Dr | Cr + - - + Stockholders’ Equity Dr | Cr -+
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STOCKHOLDERS’ EQUITY Stockholders’ Equity Dr | Cr - | + Dividends | Capital Stock Expenses | Revenues
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STOCKHOLDERS’ EQUITY Capital Stock Dividends | Cr Dr | Revenues Expenses | Cr Dr |
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CAPITAL STOCK Capital Stock | Cr
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DIVIDENDS Dividends Dr |
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REVENUES _Revenues | Cr
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