WK4

Monday, 29 January 2024

8:59 am

REVIEW

REVENUE - EXPENSES

Types of Revenue
Sales
Rent
Fees

(Tells everything at certation period)

Balance Sheet (Statement of Financial Position) - Is a Snapshot - Statement of the Business's Financial
Position at a specific time.
To know how much the business owns and owes.
(Tell the changes in the Period)
Income Statement (Statement of Profit & Loss) - Is a Video (Recorded across a period) - Profit / Loss
calculates revenue subtracting expenses.
To know how much Profit or Loss the Business made.
 Fees for Service
 Sales for Products
 Statement of Retained Earning
Statement of Owner's Equity (Statement of Changes in Equity): Change Equity
To know how much the owner owns and owes.
 Initial Investment
 Profit / Loss
 Withdrawals / Drawings
 Additional Capital
Statement of Cashflow
 The movement of money in and out
o Operation - Cost of operating the Business
o Investments - Adding assets into the Business by buying or selling current assets
o Financing - Borrowing and paying money

Breakeven - You make enough revenue to cover expenses.

Non-Profit Organizations - cannot exist for making profit but still need to make profit to continue
existing.
New Topic
The Journal
Journal - Where you record everything
Double Entry - There has to be an entry in Debit and Credit side and values should cancel each other out

Transactions
Analyzations - Putting where the thing belongs in T Balance

Business Story

1. Opening of a Business
2. Borrow $500

Penalize, Terminated

Regular Process
 Daily Journal
 Daily Ledger
 All Normal Balances
 Unadjusted Trial Balance
 Adjustments
 Adjusted Trial Balance
o Financial Statements
o Income Statement
o Owner's Equity Statement
o Cashflow
o Balance Sheet

Debit Credit
Assets Liabilities
Withdrawals Owner’s Capital
Expenses Revenue

Journal Entry

Date Journal Debit (Dr) Credit (Cr)

January 8, 2023 Cash $1000

Capital $1000

Open Business

Cash 500

Credit 500

Loan

Cash 500
 Accounts Receivable 500

Sales

Ledger
Cash
Cash

1000

500

1000

Capital

1000

1000

Capital

1000

1000

Accounts Payable

500

500