Accounting Class

Helpful Hints:

Sold Services---means SALES                        Personal use---means DRAWING                            Investment---means Capital

Classifications of accounts:  Assets, Liability, Owners Equity or Capital (Drawing, Investments), Revenue (Sales), Expenses

Assets are:  Cash, Supplies, Prepaid Insurance, Accounts Receivable    Debit +     Credit -

Liabilities are:  Accounts Payable    Debit -    Credit +

Capital or Owners Equity:

John Doe, Capital  Debit  - Credit   +                                        

John Doe, Drawing  Debit +  Credit -

Revenue:  Sales   Debit -   Credit +

Expenses:  Advertising Expense, Rent Expense, Misc. Expense   Debit  +   Credit  -

Service Charges are journalized to MISC. EXPENSE

Outstanding checks or deposits are ones the BANK has NOT received.

Adjusting Entries:

Supplies  Expense            D

   Supplies                             C

 

Insurance Expense            D

   Prepaid Insurance                C

 

Closing Entries:

 

Sales                                D

   Income Summary                 C

 

Income Summary            D

    Advertising Expense            C

    Misc. Expense                    C

    Supplies Expense                C

    Insurance Expense              C

    Any other Exp???                C

 

Income Summary            D                         (if Net Loss)  Joe ?, Capital    D

    Joe ?, Capital                        C                                       Income Summary    C

 

Joe ?, Capital                D

   Joe ?, Drawing                        C

 

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Transactions:

 

Received CASH from OWNER as an investment.

Cash    D

Joe Moe, Capital  C

 

Paid CASH for SUPPLIES

Supplies   D

Cash                C

 

Paid CASH for INSURANCE

Prepaid Insurance   D

Cash         C

 

Bought SUPPLIES ON ACCOUNT from LARSON CO.

Supplies    D

Acct. Pay.-Larson Co.    C

 

Paid CASH ON ACCOUNT to LARSON CO.

Acc. Pay.-Larson Co.    D

Cash     C

 

Received CASH from SALES

Cash    D

Sales    C

 

SOLD services ON ACCOUNT to KIDS TIME

Acc. Rec.-Kid Time     D

Sales     C

 

Paid CASH for RENT   (this is for any expense:  Advertising, supplies, Insurance....)

Rent Expense     D

Cash   C

 

Received CASH ON ACCOUNT from KID TIME

Cash     D

Acc. Rec.-Kid Time    C

 

Paid CASH to OWNER for PERSONAL USE

Joe Moe, Drawing     D

Cash    C

 

Received BANK STATEMENT showing August BANK SERVICE CHARGE

Misc. Expense    D

Cash    C

 

Received notice from the bank of a DISHONORED CHECK from KIDDY PLAY

Acc. Rec.-Kiddy Play      D

Cash      C

 

Paid CASH to establish a PETTY CASH FUND

Petty Cash    D

Cash    C

 

Paid CASH to REPLENISH the PETTY CASH fund, $ misc. expense, $advertising, 

Misc. Exp                 D

Advertising Expense  D

Cash             C

 

Purchased MERCHANDISE for CASH

Purchases     D

Cash       C

 

Purchased MERCHANDISE ON ACCOUNT from CROWN LTD.

Purchases    D

(Acc. Pay)-Crown Ltd.   C

 

Bought STORE SUPPLIES ON ACCOUNT from FOXFIRE SUPPLY

Supplies-Store      D  (Gen.)

(Acc. Pay.)  FoxFire    C

 

Paid CASH ON ACCOUNT to PACIFIC IMPORTS covering purchase Invoice

(Acc. Pay.)  Pacific Imports     D

Cash       C

 

JOE MOE, partner, withdrew MERCHANDISE for personal use

Joe Moe, Drawing     D

Purchases        C

 

Recorded CASH & CREDIT CARD SALES  plus SALES TAX

Cash     D

Sales       C

Sales Tax Payable   C

 

SOLD merchandise ON ACCOUNT to KIDS PLAYTIME

(Acc. Rec.) -Kids Playtime    D

Sales      C

Sales Tax Payable   C

 

Received CASH ON ACCOUNT from FIESTA INC.

Cash     D

(Acc. Rec.)-Fiesta Inc.   C

 

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PROVING CASH

 

Cash on hand beginning of month

+ Plus CASH RECEIVED

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Total

- Less CASH PAID

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+Cash Balance at end of month

 

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