Chapter 3 Accounting Section 1



Chapter 5

Accounting Section 1

Notes with key vocabulary

Demo Prob

WB Page 42 5-1 (Textbook directions page 110)

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Chapter 5

Accounting Section 2

Notes with key vocabulary

WB Page 42 5-2 (Textbook directions page 116)

WB Page 43 5-3 (Textbook directions page 122)

WB Page 43 5-4 (Textbook directions page 122)

WB Page 44 5-5 Together (Textbook directions page 123)

WB Page 46 5-6 (Textbook directions page 124)

WB Page 46 5-7 Together (Textbook directions page 125)

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Know: Understanding Accounting Concepts and Procedures

Chapter 5 Notes

Temporary Capital Accounts: Revenue, expenses and withdrawals start each new accounting period with a zero balance. At the end of the accounting period, any balance is transferred to the owner’s equity account.

Ie) Utility Expense

Ie) A withdrawal is an amount of money or an asset the owner takes out of the business. Since withdrawals do not happen frequently, it is classified as a temporary owner’s equity account. Withdrawals are like expenses they decrease capital, so the rules are the same as for expense accounts.

Permanent Accounts: The owner’s capital account is a permanent record. These records are continuous from one accounting period to the next.

Ie) Supplies

Revenue: Money earned from selling goods or services.

Ie) Fees

*Revenue increases Owner’s Capital

Expenses: costs of doing business.

*Expenses decrease Owner’s Capital

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