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ACCT 2000 Chapters 4

ACCT 2000 Chapters 4 - Accounting Cycle(Ch4 Recordkeeping...

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Accounting Cycle (Ch4) Recordkeeping Function 1. Transaction Analysis Which specific account? Increased or decreased Should be at least 2 accounts affected by transactions Ex 1: Owners invested $25,000 in the corporation “Cash” increased by $25,000 “Capital Stock” increased by $25,000 Ex2: Company purchased a computer on credit for $2,000 “Accounts Payable” increased by $2,000 “Equipment” increased by $2,000 Ex3: Company performed legal services for a client and invoiced the client $2,500 “Accounts Receivable” increased by $2,500 “Service Revenue” increased by $2,500 Ex4: Company paid $1,000 for a new HP printer “Equipment” increased by $1,000 “Cash” decreased by $1,000 Ex5: Company borrowed $10,000 from its bank “Cash” increased by $10,000 “Note Payable” increased by $10,000 (*PRACTICE CHAPTER 4 ASSIGNMENTS ON SYLLABUS) 2. Prepare Journal Entries Debits = Left Credits = Right Assets Liabilities Debits Credits Debits Credits Increase Decrease Decrease Increase
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Revenues Expenses Capital Stock Debits Credits Debits Credits Debits Credits Decreased Increased Increased Decreased Decreased Increased Assets and Expenses are increased by Debits and decreased by Credits Liab, RNS, C/S,& R/E are increased by Credits and decreased by Debits In every Journal Entry there should be at least one account Debited and one account Credited The sum of the Debit dollar amount must be equal to the sum of the Credit dollar amount DEBITS = CREDITS Journal Entries look like: Date of Trans.
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