SLAM2020

the accounting equation

assets = liabilities + equity (capital)

accrued liabilities

expenses that are owed but not yet paid

a firm performs a service for a client who promises to pay within the next week. on the day the service is performed, what effect does it have on the accounting equation?

total assets and owner’s equity increases

jacks ltd collects cash from a client on account. what double entry should be made?

debit cash and credit accounts receivable

owners of a corporation receive return

by realizing gains through increases in share price and cash dividends

company x pays its electricity bill in advance at the beginning of each year. if the company’s accountant records the transaction as an expense payment, which of the following is true

assets are understated

if the owner of a business withdraws money from the business for personal use which of the following is true

owner’s equity decreases and total assets decrease

the accrual concept

accrual accounting records revenues when they are earned and expenses when they are incurred whether or not payments have been made

accumulated depreciation is known as a

contra asset account because it is paired with an asset account and has a credit balance

accrued revenue recorded as

debit accounts receivable and credit revenue

unearned revenue recorded as

debit cash and credit unearned revenue

depreciation is recorded as

debit depreciation expense and credit accumulated depreciation

balance sheet

represents the assets and liabilities of the company

income statement

shows all of the revenues of the company less the expenses to arrive at the net income (revenues - expenses)

statement of owner’s equity

capital and net income - withdrawals