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PRACTICAL ACCOUNTING 1

Topic: SINGLE ENTRY

Era-CPAR Resources

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Computation of net income using Single Entry Method A. For Single Proprietorship and Partnership Increase/Decrease in Net Assets: Capital balance, end Capital balance, beginning Withdrawals Additional Investments / Contributions Net Income B. For Corporation Increase/Decrease in Retained earnings: Retained earnings, end Retained earnings, beginning Dividends declared Net Income Pxx (xx) Pxx (xx)

Pxx xx ( xx) Pxx

Pxx xx Pxx

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Computation of Net Income by Analyzing Changes in Account Balances A. For Single Proprietorship and Partnership Increase in Assets Decrease in Assets Increase in Liabilities Decrease in Liabilities Increase in Net Assets Withdrawals Additional Investments/Contributions Net Income B. For Corporation Increase in Assets Decrease in Assets Increase in Liabilities Decrease in Liabilities Increase in Stockholders’ Equity Increase in Contributed Capital Decrease in Contributed Capital Increase in Retained Earnings Add: Dividends declared Net Income Dr(Cr) Pxx (xx) (xx) xx xx (xx) xx xx xx Pxx Dr(Cr) Pxx (xx) (xx) xx xx xx (xx) Pxx

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PRACTICAL ACCOUNTING 1
Cash vs. Accrual Formulas: Cash Basis 1. Total Sales Cash Sales Add: Sales on account: AR and NR, end Collections of AR /NR NR Discounted Write off Sales returns and allowances Sales discounts AR and NR, beginning Total Sales 2. Total Purchases Cash Purchases Add: Purchases on account: AP and NP, end Payments on AP/NP Purchase returns and allowances Purchase discounts AP and NP, beginning Total Purchases 3. Expenses in General Expenses Paid Add/(Deduct): Prepaid expenses, beginning Accrued expenses, end Prepaid expenses, end Accrued expenses, beginning Total Expenses Incurred 4. Other Income Income (cash) received Add/(Deduct): Unearned income, beginning Accrued income, end Unearned income, end Accrued income, beginning Total Income Earned 5. Depreciation (applicable to cash and accrual basis) PPE beg Add: Acquisition / Purchase of PPE Total xx xx xx xx . . xx Cash Basis xx xx

Era-CPAR Resources

Accrual Basis xx xx xx xx xx xx xx (xx) xx Accrual Basis xx xx xx xx (xx) xx Accrual Basis xx xx xx (xx) (xx) xx Accrual Basis xx xx xx (xx) (xx) xx

. . xx Cash Basis

. . xx Cash Basis

. . xx

xx xx xx

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PRACTICAL ACCOUNTING 1
Less: PPE end Sale or Disposal of PPE Depreciation expense

Era-CPAR Resources
xx xx xx xx

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