What is considered a liability? any “payable account”, unearned revenue Summer Leasing received $10,300 for 24 months rent in advance. How should summer record this transaction?

Dividends
Ending Balance

what goes on the balance sheet?

Assets, Liabilities, Stockholders Equity

What is considered a liability?

any “payable account”, unearned revenue

Summer Leasing received $10,300 for 24 months rent in advance. How should summer record this transaction?

Debit: cash
Credit: unearned revenue

Children’s Service Company provides services to customers totalling $3,900, for which it billed the customer. How would the transaction be recorded?

Debit: accounts receivable $3,900
Credit: service revenue $3,900

What is a deferred revenue account?

– when a customer pays cash in advance
– when you already received money and you haven’t completed the act yet

What is an entry to close a dividends account?

Debit: Retained Earnings
Credit: Dividends

Provide services worth $8,000 to customers on account

Debit: Accounts Receivable
Credit: Service Revenue

Purchase supplies of $1500 on account

Debit: Supplies
Credit: Accounts Payable

how to calculate stockholders’ equity

common stock + retained earnings

pay $7000 for employee salaries

debit: salaries expense 7000
credit: cash 7000

what do you not use when calculating operating income?

income and interest expense

in a period of rising cost, what happens when you use LIFO?

LIFO has a lower net income, watch for purchases increasing in cost

what is lower of cost and net realizable value?

when value of inventory falls under the original cost

goodwill formula

purchasing price – fair value of net assets
not amortized

 

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