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21 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Expenses which side increase/decrease? |
Debit - Increases; Credit - Decreases |
affected like Assets; CONTRA ACCT |
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Common Stock which side increase/decrease? |
Credit - Increases; Debit - Decreases |
What account is Common Stock? |
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Revenue which side increase/decrease? |
Credit - Increases; Debit - Decreases |
affected like Liabilities |
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Retained Earnings which side increase/decrease? |
Credit - Increases; Debit - Decreases |
What account is RE? |
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Some examples of Stockholder's Equity accounts are? |
Retained Earnings, Common Stock, and Dividends |
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Dividends which side increase/decrease? |
Debit - Increases; Credit - Decreases |
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Income Summary which side increase/decrease? |
Credit - Increases; Debit - Decreases |
There's more Rev than Exp and Rev +CR |
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Owners INVEST in exchange for COMMON STOCK. Which major accounts effected and +/-? |
Assets (Cash); Increase Stock. Eq. (CS); Increase |
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Disburse CASH for admin. WAGES Which major accounts effected and +/-? |
Exp (Admin. Wages); Increase **Stock Eq. (Exp effects SE); Decrease Assets (Cash); Decrease |
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Purchase office EQUIPMENT, giving 10% promissory NOTE in exchange Which major accounts effected and +/-? |
Asset (Equip); Increase Liab (Notes Pay); Increase |
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Receive CASH for SERVICES PERFORMED
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Assets (Cash); Increase Rev (serv. performed); Increase **Stock Eq. (Exp effects SE); Increase |
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The accounting equation has to balance. If two accounts are affected, but the account isn't balanced, what does that mean? |
More than two accounts are affected. or it's the wrong accounts. |
**A good way to double check your work** |
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Why is the Accounting Equation important? |
1. Need $ to start business 2. Businesses need SUPPLIES, things to run business (Assets) |
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What are the two ways to get money to start a business? |
1. borrow from bank or corp (creditor) - Liabilities 2. Investors or individuals (become shareholder) - Equity |
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Does Revenue have same or opposite effect on Stock Eq? |
Same |
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Does Expense have same or opposite effect on Stock Eq? |
Opposite |
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Journal Entry An investor purchases 100 shares of ABC Corp. for $52 per share. The par value of ea. share is $25. |
Cash $5200 Common Stock $2500 Add'l Paid in Cap.- C/S $2700 |
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Journal Entry PURCHASED doors on account, $50,000. The PERIODIC inventory method is used. |
Purchases $50,000 A/P Purchases $50,000 |
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Journal Entry Purchased DOORS on account, $50,000. The PERPETUAL inventory method is used. |
Inventory $50,000 A/P $50,000 |
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T/F Sometimes adjusting entries effect cash accounts |
False, never affected |
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3 significant contributions the Journal has to the recording process |
-It discloses in one place the complete effect of a transaction. -It provides a chronological record of transactions. -It helps to prevent or locate errors because the debit and credit amounts for each entry can be readily compared |
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