Weitere ähnliche Inhalte Ähnlich wie Basic accounting in 10 mints (20) Kürzlich hochgeladen (20) Basic accounting in 10 mints7. There are only “three
categories” of credits:
Liabilities,
Equity,
and Revenues.
8. Now a critic would say…..
Contra-Assets are also Credit.
Treasury stock are also Debit.
10. Assets are things you own.
Liabilities are things you owe.
Equity is your investment in the company.
12. An Account is a “Catalogue Number”
with a description.
For Example:
101 Cash
13. Every account will fall into
one of the “5 Categories”:
Assets
Expenses
Liabilities
Equity
Revenues
14. A list of these accounts
is called the “chart of Accounts”.
15. Now picture if things big “chart of accounts”
listed all the activity in each account under
their descriptions, with an ending balance.
17. Now when you have all your accounts
listed this way you end up with this big book.
19. Now let us say you want to look at
this big General ledger but without
all that annoying details.
20. You want to see the account number,
description and ending balance.
22. Your Trial Balance will present the
debit in the left column and
your credit in the right column.
23. Each column will have the same total. Why?
Because Debit equal Credit.
Debit = Credit
25. Remember all that annoying activity
in the General Ledger?
You have to put it in there manually.
26. And when you do, you are going to
keep a separate “Journal” to
remember.
what you did
31. We’re going to make a journal entry.
Lets buy a Equipment for $50,000 cash
33. Oh no, we got the
internet bill and it’s $50
37. We just painted a house for John
and he’s gonna pay us
$400 next month.
47. Lets make an “Income statement” from
the income statement account.
48. Income Statement
Revenue $ 15,000
Expenses:
Salaries $ 300
Utilities $ 200
Bad Debt $ 200
Total Expenses $ 700
Net Income $ 14,300
49. Now let’s take the balance sheet accounts
and make a “Balance sheet”.
50. Balance Sheet
Assets
Cash $ 1,000
Accounts Receivable $ 5,000
Property & Equipment $ 70,000
Total $ 76,000
Liabilities
Accounts Payable $ 5,000
Long Term Debt $ 3,000
Equity
Retained Earnings $ 7,000
Paid-in-Capital $ 61,000
Total $ 76,000
52. Say it with me…….
Debits equal credits
Debits = Credits
54. But wait, If debits equal credits,
how can a balance sheet balance
with revenues and expenses?
55. At year end, we flushed the
income statement accounts
into retained earnings.
56. On January 1, all your
“ Income statement accounts”
will have “zero balances”.
57. All of your balance sheet accounts
will remain the same, except
for retained earnings.
64. Assets
Cash $ 10,000
Accounts Receivable $ 5,000
Allowance for Doubtful Accounts $ (200) $ 4,800
Property & Equipment $ 70,000
Total $ 84,800
65. Here is the Journal Entry
that establishes the Allowance.
69. Assets
Cash $ 10,000
Accounts Receivable $ 5,000
Allowance for Doubtful Accounts $ (200) $ 4,800
Property & Equipment $ 70,000
Accumulated Depreciation $ (10,000) $ 60,000
Total $ 74,800
82. Journal Entry 8
Debit Credit
460 Insurance Expense $ 1,000
130 Prepaid Insurance $ 11,000
101 Cash $ 12,000
85. Lets say it’s month-end
or year-end and you
wanna close the books.
87. If you had lets say a $5,000 payroll,
your journal entry may look like this:
88. Journal Entry 9
Debit Credit
450 Payroll-Salaries Expense $ 5,000
451 FICA Expense $ 383
452 FUTA/SUTA Expense $ 125
270 Accrued Payroll $ 5,508