REVIEW
ASSETS = LIABILITIES + EQUITY
Cash + Supplies + Equipment = Account Payable + + Capital - Withdrawals + Revenue -
+ Account Receivable + Land + Note Payable + Unearned Expenses
Buildings + Note Receivable + Revenue + Accrued
Prepaid Account Liabilities
Income statement = Revenue – Expenses
Profit: rev > exp (Net income)
Loss: rev < exp ( Net loss)
Statement of Owner’s equity (Owner's Capital) = Capital + Net income + Investment –
Withdrawals – Net Loss
Balance Sheet = Current Assets + Long Term Investments + Property, Plant, and Equipment +
Intangible Assets + Current Liabilities + Long Term Liabilities + Owner's Capital
Statement of Cash Flow/ Cash Flow Statement: Operating Activities, Investing Activities,
Finance
Income Statement (IS), Balance Sheet (BS), or Statement of Owner's Equity (SOE)
Account title Account type Normal balance Financial
statement
Cash A Debit BS
Owner’s Capital OE Credit BS
Note Payable L Credit BS
Supplies A Debit BS
Sale Revenue R Credit IS
Building A Debit BS
Inventory A Debit BS
Unearned Revenue L Credit BS
Accounts Receivable A Debit BS
Owner’s Drawings OE Debit SOE
Land A Debit BS
Cost Of Goods Sold COGS Debit ISA
Prepaid Rent A Debit BS
Accounts Payable L Credit BS
Accumulated, Depreciation CA Credit BS
Salary Expense E Debit IS
Increased (Debit) Increased (Credit)
Decreased (Credit) Decreased (Debit)
Assets Liabilities
Withdrawals Equity
Expenses Capital
Revenue
Standards: GAAG -> FASB (rules) luật
IFRS -> IASB (principles) nguyên tắc
Vietnam (VAS) -> VIFRS
Công bằng – Trung thực
Temporary Accounts: Revenue
Withdrawals
Expenses
Income summary
Permanent Accounts: Liabilities
Assets
Capital
The closing process applies only to temporary accounts.
1.Impacts on accounting equation:
f) Accounts Receivable (asset) increases
a) Cash (asset) increases
Fees Eared (equity) increases
Owner's Capital (equity) increases
DR Accounts Receivable 2,700
DR Cash 12,750
CR Fees Earned 2,700
CR Capital 12,750
g) Rent Expense (equity) increases
b) Office Supplies (asset) increases
Cash (asset) decreases
Cash (asset) decreases
DR Rent Expense 525
DR Office Supplies 375
CR Cash 525
CR Cash 375
h) Cash (asset) increases
c) Office Supplies (asset) increases
Accounts Receivable (asset) decreases
Accounts payable (liability) increases
DR Cash 1,125
DR Office Supplies 7,050
CR Accounts Receivable 1,125
CR Accounts Payable 7,050
i) Withdrawals (equity) increases
d) Cash (asset) increases
Cash (asset) decreases
Fees Earned (equity) increases
DR Withdrawals 1,000
DR Cash 1,500
CR Cash 1,000
CR Fees Earned 1,500
Asset Accounts Liability Accounts Equity Accounts
Cash Account payable Capital
Account receivable Note payable Withdrawals
Note receivable Unearned revenue Revenue
Prepaid accounts Accrued liabilities Expenses
Supplies
Land
Buildings
Equipment
2.Double entry (journalize) & ledger (T-account) – Trial balance:
March
1)DR Cash 150,000 19)DR Prepaid Insurance 5,000
DR Office Equipment 22,000 CR Cash 5,000
CR Capital 172,000
22)DR Cash 3,500
2)DR Prepaid Rent 6,000 CR Accounts Receivable 3,500 (9)
CR Cash 6,000
25)DR Accounts Receivable 3,820
3)DR Office Equipment 3,000 CR Services Revenue 3,820
DR Office Supplies 1,200
CR Accounts Payable 4,200 29)DR Drawings/ Withdrawals 5,100
CR Cash 5,100
6)DR Cash 4,000
CR Service Revenue 4,000 30)DR Office Supplies 600
CR Accounts Payable 600
9)DR Accounts Receivable 7,500
CR Services Revenue 7,500 31)DR Utilities Expense 200
CR Cash 200
13)DR Accounts Payable 4,200 (3)
CR Cash 4,200
T-account:
Cash
150,000 6,000
4,000 4,200
3,500 5,000
5,100
200
137,000
Equipment Capital
22,000 172,000
3,000 172,000
25,000
Account Receivable Supplies
7,500 3,500 1,200
3,820 600
7,820 1,800
Account Payable Withdrawals
4,200 4,200 5,100
600 5,100
600
Expense Revenue
200 4,000
200 7,500
3,820
Prepaid Account 15,320
6,000
5,000
11,000
TRIAL BALANCE
Santo Birch
April 30th
Accounts Debit Credit
Cash $137,000
Equipment $25,000
Expenses $200
Prepaid Accounts $11,000
Supplies $1,800
Withdrawals $5,100
Account Receivable $7,820
Account Payable $600
Capital $172,000
Revenue $15,320
Total $187,920 $187,920
3.Adjusting entry:
a) DR Unearned Revenue 10,000 e) DR Insurance Expense 2,800
CR Revenue 10,000 CR Prepaid Insurance 2,800
b) DR Wages Expense 9,000 f) DR Interest Receivable 750
CR Accounts Payable 9,000 CR Interest Revenue 750
c) DR Depreciation - Equipment 19,127 9) DR Interest Expense 3,500
CR Accumulated Depreciation - Equipment 19,127 CR Interest Payable 3,500
d) DR Office Supplies Expense 5,242
CR Office Supplies 5,242
