Accounting Chapter 2 Notes

dividends when stockholders receive cash from a

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Unformatted text preview: - Notes Payable: Obligation to pay cash and interest in the future. - Accrued Liabilities: Liability for which a business knows the amount owed, but the pill has not been paid. EX: Taxes payable, interest payable, salary payable Stockholders’ Equity - Common Stock: Paid- in capital from the issuance of stock by the corporation - Retained Earnings: Cumulative net income earned by the corporation over its lifetime minus cumulative net losses and dividends. - Dividends: When stockholders receive cash from a corporation. Dividends paid out mean less earnings retained by the company for future growth - Revenues: Increase in equity created by delivering goods or services to customers. Revenues refer to earnings for work done or goods delivered by the company, regardless of when the cash is received. - Revenue accs are added as needed. For example, if a company rents out a building, it creates a Rent Revenue Acc. - Expenses: Used up assets or created liabilities in the course of operating a business. Charts of Accounts - Ledger contains the accounts grouped under these headings: - Assets, Liabilities, and stockholders’ Equity - Revenue and Expenses - Chart of Accounts: List all their accounts along with account Number Debits, Credits, and Double- Entry Accounting - Accounts uses the Double- Entry System, which means that we record the dual effects of each transaction. As a result, every transaction affects at l...
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This note was uploaded on 04/08/2014 for the course ECON 121 taught by Professor Ronald during the Spring '11 term at UMBC.

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