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SOFPAC 01 Accounting Review

SOFPAC 01 Accounting Review

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05/12/2014

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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.

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