TRABAJO FINAL_INGLES III

INGLES III
Chapter 2
Chapter 1
Chapter 3
Chapter 4
Accounting files
Public
accounting
Private
accounting
Basic
Accounting
principles
business entitie
proprietorship
Corporations
Partnership
legal entity
divided into shares
Accounting equations
and
transactions
the basic elements of the accounting equation
Liabilities
Assets
Owner's equity
Accounting statements
Balance sheet
Income
statement
assets, liabilities
and owner's equity
Net profit
or Loss
Income statement.
reports the amount of net income or loss, subtracting expenses from income over a period of time
Statement of owner’s equity
the changes in the value of owner's equity
Balance Sheet
lists all assets, liabilities, and owner's equity balances as of the last day of the financial period
Account
document used to record all similar transactions
Elements
Title
Debit column
Credit column
Right side
of the account is the credit side
Left left side of an account is the debit side
Rules
1.Asset accounts have debit balances and are increased by debits.
2.Liability accounts have credit balances and are increased by credits.
3.Owner's equity accounts have credit balances and are increased by credits
4. Revenue accounts are increased when credited.
5. Expense accounts are increased when debited.
Normal Account Balances.
Credit balanes
Debit balancer
Assets, drawing, dividends, and expense accounts
Liabilities,
owner's equity, retained earnings, and revenue accounts
Chart of accounts
Assets
Liabilities
Owner's equity
Revenue
Expenses
Income
Statement
Accounts
Balance Sheet
Assets
Liabilities
Owner's equity
Fixed assets
Current assets
Long-term
Current
Cash, notes receivable, accounts receivable, inventories and
prepaid expenses
Property, plant and equipment, investments, patents and
trademarks.
Bank credit outstanding, accounts payable, interest payable, wages
payable and taxes payable.
Loans beyond one year, notes and bonds
expenses or revenues.
Trial balance
list of accounts with their debit or credit balances.
Matching Revenues & Expenses.
Cash basis.
Accrual
basis
Is a more precise method of matching
revenues and expenses
They are accounting records of income and expenditure but only when cash is received or disbursed
Adjustment Process.
Work Sheets
Used in an accounting year to correct errors, always done at the end of the accounting period
Is a collection of important data that is used to determine which adjusting entries
must be performed. It also assists in the preparation of financial statements.
Preparing Financial Statements
The results of the income
statement are transferred to the statement of owner's equity.
The owner's equity account in the balance sheet is transferred from
the statement of owner's equity..
All other balances of the balance sheet are transferred from the
work sheet balance sheet columns
Journalizing and
Posting Closing Entries.
They are the closure of all temporary accounts and the total change is recorded in the owner's capital account
Accounting Cycle
Begins with the analysis of all transactions and their logging
in the diary.
They are posted to the general ledger and a trial balance is drawn.
Everything is recorded in the worksheet.
The financial statements are finalized.
Merchandising enterprise accounting
Entries for purchases transactions accounting entries used to record the purchase and
payment of goods.
Purchased with cash
Completing the accounting cycle
Accounting cycle
Introducction to accounting
Debit Purchases
Credit Cash
Puruchased on credit
Debit Purchases
Credit Accounts Payable
Purchased on credit, but are paid back early due to a cash discount
incentive
Debit Accounts Payable
Credit Cas
Credit Purchases Discount debit Accounts
Payable
Credit Cash
Credit Purchases Discount
Purchases returns and allowances rules
If merchandise is returned or a price adjustment is necessary:
debit Accounts Payable and credit the Purchases Returns and Allowances account.
Sales Accounting.
The sales account should be credited if goods are sold for cash or on credit
For the advance payment a discount incentive must be given
All sales
discounts, returns, and allowances reduce sales revenues.
Rules for recording sales transactions.
3.If they are sold through a credit card, there will be a service fee. In that case they are debited to cash and card collection fees credit and credit accounts receivable.
1.If they are sold on credit, accounts receivable and credit sales are debited
2.If payments are made in cash, cash and credit accounts are debited
Recording Sales Discounts
If a cash discount is taken advantage of, the cash and sale discount and accounts are credited by cash
Sales Accounting.
Manufacturers and wholesalers reduce list prices by allowing commercial discounts
Discounts vary depending on the customer and the size of the order
Trade discounts allow flexible pricing without having to print new catalogs
They are not reflected in the accounting records, only the price agreed between a buyer and a seller is recorded
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