Accounting Review

Assets = Liability + Equity Accrual accounts Revenue earned Expenses incurred Turning accounts Close to returned earnings at end of period

Prepaid Revenue liability unearned revenue

Sell inventory costing 500$ to a customer for 700$ in cash / cash goes up 700 / inventory goes down 500 / no effect on liability / retained earning goes up 200

Periodic meth / buy inventory + purchases = cost of goods available / count inventory get ending inventory amount = cost of goods sold Perpetual method / everything gets counted as soon as its done Fifo = first in first out Lifo = last in first out Bank balance / + deposit in cash/ - outstanding checks / -+ bank error Cash statement (book) balance / + NSF fees / - NSF checks/ + interest / + lost check deposits Allowance for doubtful accounts accounts receivable = net realistic value Notes receivable = assets / cash is gone! Principle x rate x time = interest receivable Issue of stock Stockholder equity = retained earnings / capital Ex of par value issue common stock (100 shares) for 12$ and par value is 10$ ^^^you receive 1200 / par is 1000 = you increase CS account 1000 / increase extra capital 200$ / 12000$ = total paid in capital

Shares authorized vs. issued vs. outstanding Issued stock = amount of shared sold since you started / can only go posivitve Bought back stock is treasury stock Outstanding stock = issued stock per treasury stock Preferred stock no voting rights first stock holders usually get dividends first Dividends date of declaration- day that they declare dividends / date of record / date of payment Statement of cash flow - know what it does period of operating activities = normal operation / financial activities= anything to do with borrowing or giving money back , notes payable , sell stock / investment activities= long term investment = net total cash flow + beginning cash = end cash Direct = direct cash flow , - cash paid to supplies + cash from customers Indirect = net income +- in current assets and liabilities + depreciation +- gains and losses