Accounting Concepts: Assets, Liabilities, and Equity Explained
Classified in Mathematics
Written on in 
English with a size of 3.29 KB
Accounting Concepts: Real Value Recording
Cost Concept: To record the real value and not the estimated value.
Stockholders' Equity = Assets - Liabilities
Earning Revenue: Increases cash and Stockholders' Equity.
Paying a Liability: Decreases Assets and Liabilities.
Permanent/Real Accounts (Retained Earnings): Assets, Liabilities, Owners' Equity (Accounts found in the balance sheet).
Nominal/Temporary Accounts: Revenue, Expenses, Dividends.
Accrual Accounting: Revenue recorded when services are rendered and earned, and expenses when they are incurred.
Cash Accounting: When cash is received.
Deferred Expenses: Recorded. Accrued Expenses: Not recorded until the end.
Prepaid Expenses: Become expenses when their economic value expires.
Deferred: Postponed... Deferred Expenses: Bill not received yet.
Total Supplies + (Beginning + During) - On Hand = Supplies Expense (Debit), Supplies (Credit)
Unearned Fees = Liability
The income statement should be prepared before the statement of Retained Earnings and the Balance Sheet.
Long-Term Liabilities should be paid after 1 year.
Unearned rent appears on the post-closing trial balance.
Cost of Merchandise = (Purchases + Expenses) - (Discounts + Returns)
Periodic inventory determines inventory on hand at the end of the year; perpetual inventory is tracked after every sale.
Bank Cards (MC, Visa): Debit Cash, Credit Sales
FOB Shipping Point: Buyer pays freight (transport) cost. FOB Destination: Seller pays.
Net 45 = 45 days... LIFO: Most recent cost.
Perpetual Inventory: Continually discloses the inventory.
A voucher is supported by a purchase order, warehouse reports, invoice from the supplier, check requisition, and check.
Voucher: Data is recorded about Liabilities and Specific Information of Accounts Payable.
A promissory note is indicated on the bank statement by a Credit Memo.
Check recorded wrong = (Real - Fake)... Debit Cash, Credit A/R
NSF checks: Deducted from Depositors' records.
AFDA: Contra Asset and Normal Balance as a Credit.
AFDA = Net Sales * %
Aging = A/R - what is credited
Allowance Method: Bad Debt Expense (Debit), AFDA (Credit)
A promissory note: Note Receivable (Debit), A/R (Credit)
Maturity Value = Face Value * % * (Days/360) = Interest/Months Given
Interest Receivable (Debit), Interest Revenue (Credit)
BV = Cost - Accumulated Depreciation
Amount of Depreciation = BV / #hours = Total * #hours Used
Depreciation Expense (Debit), Accumulated Depreciation (Credit)
Shares for Cash = Value of small share * $share
Shares Common Stock = Value of small share * $common stock
Value of small share * % = total * last $share