ACCT 203 Week II Notes
ACCT 203 Week II Notes Acct 203
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This 2 page Class Notes was uploaded by Iveta Hristova on Friday January 22, 2016. The Class Notes belongs to Acct 203 at College of Charleston taught by William VanDenburgh in Spring 2016. Since its upload, it has received 36 views. For similar materials see Financial Accounting in Math at College of Charleston.
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Date Created: 01/22/16
Accounting 203 Week II 18 January The Income Statement Revenue – Expenses = Net Income Revenue - credit -sales revenue: revenue from sales -service revenue: revenue from promotional services Expenses – money that spent by the company for the company, debit Cash Basis – revenues when cash is received and spent. Accrual Basis – revenues when they are earned and expenses in the same period as revenues to which they relate, regardless of point in time. Accounts Payable – informal agreements, promises, smaller amouts, SHORT term (±12 months) Notes Payable – formal agreements, signed documents, LONG term (over 12 months) Accounts Receivable – is service is provided but no cash is yet received, then Accounts Receivable A+, Service Revenue R+, SE+ Debit = Credit Asset +($ you have) -($ you owe) Liability - + Stockholder’s Equity - + Revenue - + Expenses + - The Balance Sheet Assets = Liabilities + Stockholder’s Equity Common Stock Retained Earnings Revenue Expenses Financing: -Equity: the owner’s contributions and reinvestments of profit, no need to repay -Debt: Loans, must be repaid. Transactions: -External Exchanges: A, L, SE with the company and someone else. -Internal Events: occur within the company (use assets to make other assets) The Accounting Cycle 1. Analyze Duality of Effects (give & receive) A = L + SE must balance 2 & 3. Record and Summarize Record journal entries -What is debit? What is credit? What has increased and what has decreased? Summarize ledger accounts -T-accounts Trial Balance: Make sure A = L + SE is in balance by adding up the ending balances in the T-accounts. Classified Balance Sheet: Includes the current assets and liabilities. Change in Assets: A+ and A-, but no change in the Total Assets Permanent Account: Balance Sheet accounts Temporary Account: Income Statement accounts Gift Cards: Unearned revenue -when they are issued, they are considered a Liability -when they are redeemed, Sales Revenue+, SE+
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