Beruflich Dokumente
Kultur Dokumente
Notes:
1,455 AD - 1516 AD
Notes:
WhatIsBusiness?
Activities
toprovide
members
ofan
economic
system
with
goods
and
services
LO1
FormsofOrganization
SoleProprietorship
Partnership
Corporation
oneowner
twoormoreowners
entityorganizedunder
lawsofaparticularstate
LO2
Notes:
NonbusinessEntities
GovernmentEntities
Federal,State,and
LocalGovernments
PrivateOrganizations
Hospitals,Universities,
Cooperatives
TheNatureofBusinessActivity
Financing
Activities
Investing
Activities
Operating
Activities
Examples:
borrowing
saleofstock
purchaseofassets
saleof
products/services
costsincurred
tooperate
business
LO3
Notes:
WhatIsAccounting?
Identifying
Measuring
Economic
Information
to
various
users
Communicating
LO4
InternalandExternal
UsersofAccountingInformation
Current
and
Potential
Owners
Bankers
Creditors
Internal
Users
Management
Financial
Analysts
Suppliers
Trade
Associations
Government
Agencies
Notes:
DecisionsMadewith
FinancialInformation
Invest??
Addnew
productline??
Borrow $$??
Build newplant??
Extendcredit$$??
Loan$$??
Start newbusiness??
Sellstocksorbonds??
TheAccountingEquation
Assets=Liabilities+OwnersEquity
(orStockholdersEquity)
Economic
resources
Creditors
claims
toassets
Owners
claims
toassets
Examples:
Cash
Accountsreceivable
Land
Accountspayable
Notespayable
Capitalstock
Retainedearnings
LO5
Notes:
BalanceSheet
(snapshotoffinancialposition)
Assets
Liabilities
+
OwnersEquity
(orStockholdersEquity)
TopoftheWorld
BalanceSheet
June30,2012
A
A=L+SE
Currentassets:
Cash
$200
Accountsreceivable
600
Land
4,000
Lodge,liftsandequipment 2,500
Totalassets
$7,300
Notes:
TopoftheWorld
BalanceSheet
June30,2012
A=L+SE
LiabilitiesandStockholdersEquity
=L
Liabilities:
Accountspayable
Salariesandwagespayable
Notespayable
Totalliabilities
$700
400
3,000
$4,100
+SE
Stockholdersequity:
Capitalstock
Retainedearnings1,200
Totalstockholdersequity
$2,000
$3,200
TotalLiabilitiesandStockholdersEquity$7,300
IncomeStatement
(foraperiodoftime)
Revenues
Less:Expenses
Netincome
$$
($$)
$$
Notes:
TopoftheWorld
IncomeStatement
FortheYearEndedJune30,2012
Revenues Expenses=NetIncome
Revenues:
Lifttickets
Revenues
Equipmentrentals
Totalrevenues
Expenses:
Salariesandwages
Depreciation
Water,gas,andelectricity
Expenses
Insurance
Interest
Incometaxes
Totalexpenses
Netincome
Net Income
$5,800
2,200
$8,000
$2,000
100
1,500
1,100
300
1,000
6,000
$2,000
StatementofRetainedEarnings
(foraperiodoftime)
Beginningretainedearnings
$$$
Add: Netincomefortheperiod
$$$
Deduct: Dividendsfortheperiod($$$)
Endingretainedearnings
$$$
Notes:
TopoftheWorld
StatementofRetainedEarnings
FortheYearEndedJune30,2012
Retainedearnings,beginningoftheyear$0
Add: Netincomefortheyear
2,000
Deduct: Dividendsfortheyear(800)
Retainedearnings,endoftheyear$1,200
TopoftheWorld
StatementofCashFlows
FortheYearendedJune30,2012
Cashflowsfromoperatingactivities:
Cashcollectedfromcustomers
Cashpaymentsfor:
Salariesandwages
Water,gas,andelectricity
Insurance
Interest
Incometaxes
Totalcashpayments
Netcashprovidedbyoperatingactivities
$7,400
$1,000
1,500
400
300
1,000
4,800
$2,600
Notes:
TopoftheWorld
StatementofCashFlows
FortheYearendedJune30,2012
Cashflowsfrominvestingactivities:
Purchaseofland
$(4,000)
Purchaseoflodge,liftandequipment
(2,600)
Netcashflowsfrominvestingactivities
$(6,600)
Cashflowsfromfinancingactivities:
Proceedsfromissuanceoflongtermnote
$3,000
Proceedsfromissuanceofcapitalstock
2,000
Dividendsdeclaredandpaid
(800)
Netcashflowsfromfinancingactivities
4,200
Netincreaseincash
$200
Cashatbeginningofyear
0
Cashattheendoftheyear
$200
RelationshipamongFinancialStatements
TopoftheWorldExample
IncomeStatementforYearendedJune30,2012
Revenues
Less:Expenses
Netincome
$8,000
(6,000)
$2,000
StatementofRetainedEarningsforYearendedJune30,2012
Beginningbalance,retainedearnings
$0
Add:Netincome
2,000
Deduct:Cashdividends
(800)
Endingbalance,retainedearnings$1,200
BalanceSheets
June30,2012
Totalassets$7,300
Liabilities4,100
Capitalstock2,000
Retainedearnings 1,200
Totalliabilitiesandstockholdersequity$7,300
July1,2011
$0
0
0
0
$0
Notes:
ExternalandInternalEvents
Externalevents:interactionbetweenentity
andoutsideenvironment
Internalevents:
Interactionwithin
entity
LO1
SourceDocuments
Purchase
Invoice
Cash
Register
Tape
Payroll
Records
Evidenceneeded
inanaccounting
systemtorecord
transactions
Shipping
Document
Sales
Invoice
Checks
Receiving
Document
LO2
Notes:
IssueCapitalStockforCash
1/12TransactionsforGlengarryHealthClub
Assets=Liabilities+StockholdersEquity
Cash
+$100,000=
CapitalStock
+$100,000
Theaccountingequationmustalways
remaininbalance
LO3
PurchaseofPropertyin
ExchangeforNotesPayable
Assets =Liabilities+StockholdersEquity
Land
NotesPayable
+$50,000=+$200,000
Building
+$150,000
Increaseonlefthas
correspondingincreaseonright
Notes:
PurchaseofEquipment
onAccount
Assets =Liabilities+StockholdersEquity
Equip.
Accts.Pay.
+$20,000=+$20,000
Atleasttwoaccountsaffected
byeverytransaction
EffectofRevenueandExpenses
onRetainedEarnings
IncomeStatement
Revenue
Expenses
=NetIncome(Loss)
Statementof
RetainedEarnings
Beg.R/E
+NetIncome
(or NetLoss)
Dividends
=End.R/E
Notes:
SellMonthlyMemberships
onAccount
Assets=Liabilities+StockholdersEquity
Accts.Rec.
+$15,000=
RetainedEarnings
+$15,000
Revenuesincreaseretainedearnings
SellCourtTimeforCash
Assets=Liabilities+StockholdersEquity
Cash
RetainedEarnings
+$5,000=+$5,000
Revenuesincreaseretainedearnings
Notes:
PaymentofWages
andSalaries
Assets=Liabilities+StockholdersEquity
Cash
$10,000=
RetainedEarnings
$10,000
Expensesdecreaseretainedearnings
PaymentofUtilities
Assets =Liabilities+StockholdersEquity
Cash
$3,000 =
RetainedEarnings
$3,000
Expensesalsodecreaseassets
orincreaseliabilities
Notes:
Collectionof
AccountsReceivable
Assets=Liabilities+StockholdersEquity
Cash
+$4,000
= (nochangeinLiab.orS/E)
Accts.Rec.
$4,000
Assetsweretraded:
accountsreceivableforcash
PaymentofDividends
Assets=Liabilities+StockholdersEquity
Cash
$2,000 =
RetainedEarnings
$2,000
Dividendsdirectlyreduceretainedearnings
Notes:
CumulativeEffectofTransactionsfor
GlengarryHealthClub
Assets =Liabilities +S/E
Soldstock
Boughtprop.
withnote
Boughtequip.
onacct.
Sold
memberships
Soldcourttime
Paidwages
Paidutilities
CollectedA/R
Paiddividends
+$100,000 =
+$100,000
+200,000=+$200,000
+20,000
=+20,000
+15,000 =
+15,000
+5,000 =
+5,000
10,000=
10,000
3,000=
3,000
+ 4,000=(nochangeinLiabilities+SE)
4,000
2,000 =
2,000
+$325,000=+$220,000+$105,000
GlengarryHealthClub
BalanceSheet
January31,2012
Assets
Cash$ 94,000
Accts.Rec. 11,000
Equipment
20,000
Building 150,000
Land
50,000
Totalassets $325,000
LiabilitiesandStockholdersEquity
Accountspayable
Notespayable
Capitalstock
Retainedearnings
$20,000
200,000
100,000
5,000
Totalliabilities
andstockholdersequity
$325,000
Notes:
GlengarryHealthClub
IncomeStatement
FortheMonthEndedJanuary31,2012
Revenues:
Memberships
Courtfees
Expenses:
WagesandSalaries
Utilities
Netincome
$15,000
5,000
$10,000
3,000
$20,000
13,000
$7,000
SampleChartofAccounts
100199:ASSETS
100109:Cash
101:
CheckingAccount
102:
SavingsAccount
110119:Receivables
111:
AccountsReceivable
120129:PrepaidAssets
121:
CleaningSupplies
122:
PrepaidInsurance
130139:Property,Plant,and
Equipment
131:
Land
132:
Building
:
200299
LIABILITIES
200209:ShortTermLiabilities
201:
AccountsPayable
202:
Wages&SalariesPayable
:
300399
301:
302:
303:
STOCKHOLDERSEQUITY
PreferredStock
CommonStock
RetainedEarnings
400499
REVENUES
500599
EXPENSES
LO4
Notes:
GeneralLedger
Cash
+100
50
A/R
+400
100
Fileorbookthatcontainsonepage
(orentry)foreachaccount
TheTAccount
AccountName
Debitsare
enteredonleft
Creditsare
enteredonright
Representationofoneaccountinthegeneralledger
LO5
Notes:
The T Account
Account Name
400 dr.
900 cr.
500 cr.
Debits/Creditsand
theAccountingEquation
=
ASSETS
LIABILITIES
STOCKHOLDERS
EQUITY
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Oppositesidesoftheaccountingequationare
increased/decreasedinanoppositeway
Notes:
LinkBetweenRevenuesand
RetainedEarnings
RETAINED
EARNINGS
Dr.
Bothaccounts
areincreased
withcredits
+
Cr.
REVENUES
Dr.
Cr.
+
Revenuesincrease
retainedearnings
(partofstockholdersequity)
LinkBetweenExpensesand
DividendsandRetainedEarnings
RETAINED
EARNINGS
Retainedearningsis
decreasedwithdebits
Expensesanddividends
decreaseretainedearnings
Usedebitstorecord(increase)
expensesanddividends
DR.
CR.
EXPENSESAND
DIVIDENDS
DR.
CR.
Notes:
NormalAccountBalances
Debit
Assets
Expenses
Dividends
allincreased
withdebits
Credit
Liabilities
StockholdersEquity
Revenues
allincreased
withcredits
TransactionsandTAccounts
CashCapitalStock
(1)100,000
100,000(1)
(1)Issuecapitalstockfor cash
Notes:
TransactionsandTAccounts
Land
(2)50,000
NotesPayable
Building
200,000(2)
(2)150,000
(2)Purchasepropertyinexchange
forapromissorynote.
TransactionsandTAccounts
Equipment
(3)20,000
AccountsPayable
20,000(3)
(3)Purchaseequipmentonaccount
Notes:
TransactionsandTAccounts
AccountsReceivable MembershipRevenue
15,000(4)
(4)15,000
(4)Sellmonthlymembershipsonaccount
TransactionsandTAccounts
Cash
(1)100,000
(5)5,000
CourtFeeRevenue
5,000(5)
TAccountsreflect
currentandprevious
postingstotheaccount
foreachperiod
(5)Sellcourttimeforcash
Notes:
TransactionsandTAccounts
Wage&SalaryExpense
(6)10,000
Cash
(1)100,000 10,000(6)
(5)5,000 3,000(7)
UtilitiesExpense
(7)3,000
(6)Payemployeeswagesforthemonth
(7)Payutilitiesforthemonth
TransactionsandTAccounts
Cash
(1)100,000 10,000(6)
(5)5,000 3,000(7)
(8)4,000
AccountsReceivable
(4)15,000 4,000(8)
(8)Collectionofaccountsreceivable
Notes:
TransactionsandTAccounts
Cash
Dividends
(1)100,000 10,000(6)
(5)5,000 3,000(7)
(8)4,000 2,000(9)
(9)2,000
(9)Paydividends
DeterminetheBalance
oftheTAccounts
Cash
AccountsReceivable
(1)100,000 10,000(6)
(5)5,000 3,000(7)
(8)4,000 2,000(9)
(4)15,000 4,000(8)
94,000
11,000
Notes:
TheJournal
Achronologicalrecordoftransactions
Thebookoforiginalentry
Eachentryhasadebitandacredit
thatequals
Transactionsnormallyrecordedin
general journal
PostingfromJournal
Transactionsare
enteredin:
Andthenpostedto:
Journal
(viajournalentries):
Dr.Cr.
Cash
100,000
CapitalStock
100,000
LedgerAccounts
Cash
CapitalStock
Torecordtheissuanceof10,000shares
LO6
Notes:
JournalEntries
Dr.Cr.
Building
150,000
Land
50,000
NotesPayable
200,000
Torecordacquisitionofpropertyinexchangefornote
Equipment20,000
AccountsPayable
20,000
Torecordtheacquisitionofequipmentonopenaccount
AccountsReceivable15,000
MembershipRevenue15,000
Torecordsaleofmonthlymembershipsonaccount
JournalEntries
Cash
CourtFeeRevenue
Torecordsaleofcourttime
forcash.
Dr.Cr.
5,000
5,000
WageandSalaryExpense10,000
Cash
Torecordpaymentofwages
andsalaries.
10,000
UtilitiesExpense3,000
Cash3,000
Torecordpaymentofutilities.
Notes:
JournalEntries
Cash
AccountsReceivable
Torecordcollectionofaccounts
receivable.
Dr.Cr.
4,000
4,000
Dividends2,000
Cash
Torecordpaymentofdividends.
2,000
GlengarryHealthClub
TrialBalance
January31,2012
Cash
AccountsReceivable
Equipment
Building
Land
AccountsPayable
NotesPayable
CapitalStock
MembershipRevenue
CourtFeeRevenue
WageandSalaryExpense
UtilityExpense
Dividends
Totals
DebitsCredits
$94,000
11,000
20,000
150,000
50,000
$20,000
200,000
100,000
15,000
5,000
10,000
3,000
2,000
$340,000
$340,000
LO7
Notes:
EndofChapter3