Professional Documents
Culture Documents
Dividends are not an expenses. (payment to the people that own the business)
+A are Debits
+L are Credits
+EQ are Credits
+Rev (Credits), +Exp. (Debits), +Div (Debits) = EQ
Retained Earnings (at the beginging of the year) + Net income – Dividends = Retained Earnings (at the
end of the year) Use this in the balance sheet.
24!!
A=L+E
b. Equity changes
1. Capital contributions (investers, cash…) +
2. Net income (retainded earnings) + or –
3. Dividends –
31.
a. Assets ++ but capital stock is – (credit) EQ
E. 2 parts!
account receivable = debit +
Sales revenue = credit +
33.
Financial Set:
Special Journals: 4 most common transactions, efficient way to record things. Make these journals so that
what ever you put on that page is what the page says… sales, purchases…
1. Cash Receipts:
2. Cash Discernments:
3. Sales:
4. Purchases:
Subsidiary Ledgers: Contains the details about the control account (like to whom do you own the money
too? All the inventory in detail…how many of these and how much of this)
1. Accounts Recoverable
2. Accounts Payable
3. Inventory
4. Equipment
There are more but these are most common.
35.
Accrual Basis Accounting: Accounts record things when they happen not when you receive the cash or pay
the cash.
Reveanue Reconnition: When do we report the revenue (when we do the work)
Matching Priciple: We report expenses when we receive the benefit
36.
4/1
Cash Debit
Liability Credit
(9 months (all of april))
12/31
Debit nearned rent rev. –
Credit Rev +