Chapter 2 An entity gives something Gen: - Money inventory, Vouchers, deposit slips, paper checks, and currency A/R: - Promises for future cash for goods or services Inventory: - Costs the company sells customers Prepaid Expenses: - Expenses paid in advance. Such as insurance and rent Investments: - Interests purchased and held in other companies Property, Plant and Equipment: - Cost of land, building, and equipment owned by a company Liabilities: - A debt or payable Notes Payable: - Signed notes promising to pay a debt amount Accrued Liabilities: - Liability for an expense you owe but not yet paid. The debitor's Equity - Claims to the assets of the company Common stock - Ownership transferred is a corporation through stock Retained earnings - Cumulative net income minus net losses and dividends over the company's life Dividends - Distribution of the company's earnings Revenues - Increase in SE from delivering goods or services to customers (I Not on an ASSET) Revenues ↑ + NI ↑ Net Income ↑ - Div. ↑ End RE ↑ Expenses - Decrease in SE due to operating the business If Expense goes up, Net Income goes downIf NI goes down, End RE goes downIf RE goes down, SE goes down The Journal Record of increases and decreases for assets, liabilities, equity, revenue, or expense Cash (Left side) (Right side) Debit Credit Unadjusted Trial Balance Assets Liabilities SE Cash AR Supplies Land Dividends Service Revenue Rent Expense Salary Expense Utility Expense

ACCT Chapter 2

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