Mind Map Gallery TRABAJO FINAL_INGLES III
TRABAJO FINAL_INGLES III_ANDREA ARELLANO SÁNCHEZ_SECCIÓN 03_SEMESTRE 10Edited at 2021-07-07 19:53:35
Introducction to accounting
assets, liabilities and owner's equity
Net profit or Loss
Basic Accounting principles
legal entitydivided into shares
the basic elements of the accounting equation
Statement of owner’s equity
the changes in the value of owner's equity
lists all assets, liabilities, and owner's equity balances as of the last day of the financial period
reports the amount of net income or loss, subtracting expenses from income over a period of time
Completing the accounting cycle
Matching Revenues & Expenses.
They are accounting records of income and expenditure but only when cash is received or disbursed
Is a more precise method of matching revenues and expenses
Journalizing andPosting Closing Entries.
They are the closure of all temporary accounts and the total change is recorded in the owner's capital account
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.
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
list of accounts with their debit or credit balances.
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.
document used to record all similar transactions
TitleDebit columnCredit column
Right side of the account is the credit side
Left left side of an account is the debit side
Normal Account Balances.
Liabilities, owner's equity, retained earnings, and revenue accounts
Assets, drawing, dividends, and expense accounts
Chart of accounts
Assets Liabilities Owner's equity Revenue Expenses
Property, plant and equipment, investments, patents and trademarks.
Cash, notes receivable, accounts receivable, inventories and prepaid expenses
Loans beyond one year, notes and bonds
Bank credit outstanding, accounts payable, interest payable, wages payable and taxes payable.
Income Statement Accounts
expenses or revenues.
Merchandising enterprise accounting
Entries for purchases transactions accounting entries used to record the purchase and payment of goods.
Purchased with cash
Debit PurchasesCredit 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 PayableCredit CasCredit Purchases Discount debit Accounts PayableCredit CashCredit 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.
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
Manufacturers and wholesalers reduce list prices by allowing commercial discounts
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
Discounts vary depending on the customer and the size of the order