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acct chapter 3
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debit and credit
debit = left
credit = right
double-entry accounting system
credits = debits
assets =
liabilities + stockholder's equity (CS + Rev - Divd + rev - Exp)
first 5 steps in accounting cycle
1. analysis of transactions and selected other events/identification and measurement of transactions
2. journalization
3. posting
4. trial balance preparation
5. adjustments
last 5 steps in accounting cycle
6. adjust trial balance
7. statement preparation
8. closing
9. post-closing trial balance (optional)
10. reversing entries (optional)
temporary accounts
revenues, expenses, dividends
permanent accounts
assets, liabilities, stockholders' equity (common stock and retained earnings)
in closing nominal accounts:
in closing temporary accounts
reduces the balance of nominal
accounts to zero
prepaid expense
expenses paid in cash and recorded as assets before they are used or consumed
unearned revenues
revenues received in cash and recorded as liabilities before they are earned
supplies used is? supplies used to run business is?
1. expense
2. asset
revenues result in a ? to a liability account and a ? to a revenue account
1. debit (decrease)
2. credit (increase)
book value
cost - accumulated depreciation
accrued revenue
revenues earned but not yet received in cash or recorded
accrued expenses
expenses incurred but not yet paid in cash or recorded
Author
abifulco
ID
35152
Card Set
acct chapter 3
Description
acct chapter 3 rest of chapter
Updated
2010-09-16T18:47:52Z
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