Accounting Review

Prepared by: Alexandro Ponteras

Charts of Accounts
• Is a listing of all accounts used in a business
General Ledger
• It is a book or file drawer where records are
kept.
Accounting Equation
• It is the relationship among asset, liabilities and
owners equity.

• Assets = liabilities + owners equity

• Assets – something that is owned by a company

• Liabilities – something owed by a company
• Owners equity – difference between the total
amount of assets and the total amount of
liabilities
*note
• The accounting equation must always be equal
Sample transactions
(month of September)
• 1 – receive cash from owner as an
investment, $ 9000.00
• 2 – paid cash for supplies, $ 185.00
• 3 – paid cash for insurance, $ 850.00
(note: prepaid insurance account is used)
• 4 – bought supplies on account, $ 1000
• 6 – paid cash on account, $ 600.00
Exercise 01-t_<your family
name> (month of October)
• 1- received cash from owner as an investment,
$ 9000.00
• 2 – paid cash for supplies, $ 185.00
• 3 – paid cash for insurance, $ 850.00 (note:
prepaid insurance account is used)
• 4 – paid cash for legal expense, $ 350.00
• 4 – bought supplies on account, $ 1000.00
• 6 – owner withdrew cash for personal use, $
1200.00*
• 6 – paid cash on account, $ 600.00
• * Julia Hollister, Drawing, is a contra account.
Contra account always reduced a related
account.