journal entry to record estimation of warranties for year warranty expense warranty liability journal entry to pay off actual warranty expenditures warranty expense

journal entry to record estimation of warranties for year

warranty expense 
warranty liability

journal entry to pay off actual warranty expenditures

warranty expense 
cash

how to calculate interest expense for note payable

principal x % x fraction of the year **

accrual basis

record revenues when we earn them and record expenses with related revenues

accounting equation

assets = liabilities + SHE

What is considered an asset?

Cash, any “receivable” account, any “prepaid” account, inventory, land, buildings, supplies, equipment, accumulated depreciation

what is considered to be apart of Stockholders equity?

Common stock, retained earnings, dividends

what is “DEALOR”?

Dividends, Expenses, Assets 
-to increase, debit. to decrease, credit

Liabilities, Owner’s Equity, Retained Earnings
-to increase, credit. to decrease, debit

what is “RED = DEAD”

when you are making closing entries, you only close “revenues, expenses, and dividend” accounts

T/F: You use cash in adjusting entries

FALSE
– adjusting entries never involve cash

When making adjusting entries, how do you adjust expense and revenue accounts?

expenses are debited, revenues are credited

The accounts payable account has a beginning balance of $10,600 and the company purchased $55,000 of supplies on account during the month. The ending balance was $19,500. How much did the company pay to creditors during the month?

$46,100

(10,600+55,000-19,500)

Issue common stock for $25,000

cash
common stock

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