Chap. 2-Concept - Chapter 2 Concept Chapter 2 Analyzing...

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Chapter 2 Concept Chapter 2 Analyzing Transactions (Concept) 1. T Account Amounts entered on the left side of an account are debits , and amounts entered on the right side of an account are credits . Balance of the Account - The difference of the amounts of debits and the amount of credits. 2. Ledger: a group of accounts for a business entity. a). general ledger has seven columns, which are date , description , post reference , debit credit , debit balance , and credit balance . b). the format of ledger (c > a+ b) Account account name Account No. Date Item Post Ref. Debit Credit Balance Debit Credit Year M Day 1 Day 2 Day 3 xx xy xz $ a $ b $ c* $ a $ a+b ($ c-a-b) 3. Chart of accounts: a list of the accounts in the ledger. --Five Major Accounts a). Assets- resources owned by the business entity, which can be physical items, or intangibles that have values (patent rights, copy rights, and trademarks).
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b). Liabilities- debts owned by creditors, which is often identified on the balance sheet by the titles that include the world payable, or unearned revenues. c). Owner’s Equity- owner’s right to the assets of the business after all liabilities have been paid. d). Revenues- Increases in owner’s equity of selling services or products to customers. e). Expenses- Using up assets or consuming services in the process of generating revenues. --Chart of Accounts (1). Account Number has two digitals. (2). The first digit indicates the major account group of the ledger in which the account is located. (3). The second digit indicates the location of the account within its group. Balance Sheet Accounts Income Statement Accounts 1. Assets 4. Revenue 11. Cash 12. Accounts Receivable 14. Supplies 15. Prepaid Insurance 17. Land 18. Office Equipment 19. Accumulated Depreciation- Office Equipment 41. Fees Earned 42. Rent Revenue 5. Expenses 51. Wages Expenses 52. Rent Expenses 53. Depreciation Expense 54. Utilities Expense 55. Supplies Expense 56. Insurance Expense 59. Miscellaneous Expense 2. Liabilities 21. Accounts Payable 22. Wages Payable
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23. Unearned Rent
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This note was uploaded on 06/30/2011 for the course ACCOUNTING 2301 taught by Professor Sarah during the Fall '10 term at HCCS.

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Chap. 2-Concept - Chapter 2 Concept Chapter 2 Analyzing...

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