Professional Documents
Culture Documents
Accounting Reviewer
Accounting Reviewer
A= L + OE – Accounting Equation
Asset- Debit
Liabilities- Credit
Capital- Credit
Revenues- Credit
Expenses- Debit
Withdrawals- Debit
Examples:
Cash
Accounts Receivable- amount of money owed by the customer to the business
Notes Receivable- amount of money owed by the customers evidenced by a promissory note
Inventory- often called merchandise, refers to goods and materials that a business holds for sale to customers
in the near future
Unused Supplies- supplies which remain unused at the end of accounting period
Prepaid Expenses- expenses already paid but not yet incurred(used)
- Examples: Prepaid Rent, Prepaid Insurance, Prepaid Supplies
Accrued Income( or Accrued Revenues)- earned but not yet received in cash or other assets
Non-current Assets-company's long-term investments or assets that have a useful life of more than one year
Examples:
Accumulated Depreciation- a contra account that contains the sum of the periodic depreciation charges
Intangible Assets- identifiable, nonmonetary assets without physical substance held for use in the production or supply
of goods/services.
Depreciation- the decrease in value of assets; or the allocation of the cost of assets to periods in which the assets are
used
Formula:
Examples:
Examples:
Mortgage Payable- borrowed money from a bank with a collateral; the liability of a property owner to pay a
loan that is secured by property
Long-term Notes Payable
Bonds Payable- financial instruments representing a company’s commitment to pay back a specified sum to the
owner of the instrument in a specified time together with periodic interest payments over the life of the bond
Bond- a contract between the issuer and the lender specifying the terms of repayment and the interest to be
charged
ACCOUNTING CYCLE
1. Identify
2. Journalize
3. Posting
4. Trial Balance
5. Adjustments
6. Journalize
7. Closing
8. Post-Closing Trial Balance
9. Reversing