Accounting 101 Exam CH 1-4 QUESTIONS WITH COMPLETE 100% VERIFIED SOLUTIONS 2024/2025, Study Guides, Projects, Research of Accounting

Download Accounting 101 Exam CH 1-4 QUESTIONS WITH COMPLETE 100% VERIFIED SOLUTIONS 2024/2025 and more Study Guides, Projects, Research Accounting in PDF only on Docsity! Accounting 101 Exam CH 1-4 QUESTIONS WITH COMPLETE 100% VERIFIED SOLUTIONS 2024/2025 Accounting Equation Assets= Liabilities + stockholder's equity Assets Resources owned by company Liabilities Rights of the creditors or amounts owed to creditors Equity Rights of the owner AED Assets, Expenses, Dividends = Normal debit balance and increase on the debit side LER Liabilities, Equity, Revenue = Normal credit balances and increase on the credit side Assets examples Accounts receivable, Cash, Supplies, Inventory, Prepaids Liabilities examples Accounts payable, Wages Payable, Salaries Payable, Unearned Revenue, Unearned rent, Equity Examples Retained earnings Capital/Common stock Revenue Examples Rent Revenue, Sales, Fees earned Expenses Examples Wages Expense, Salaries Expense, Supplies Expense, Utilities Expense, Misc. Expense Balance Sheet Assets, Liabilities and Equity Income statement Revenue and expenses Rotten Eggs IS Disgusting.... REally Revenue and expenses closed to income summary, Income summary and dividends closed to retained earnings *** Balance sheet accounts are NOT closed Accounting Cycle Journal> Legder> Trial balance (unadjusted) > journal > Legder > Trial balance (Adjusted) > Financial statements > Journal > Ledger >Post-closing trial balance Omitting adjusting entries Omitting expenses- Net income overstated Omitting revenues- Net income understated 5 Types of Adjusting Entries Prepaids Accrued Expenses Accrued Revenues Unearned Fees Depreciation Prepaid Adjusting Entry Debit: Prepaid expense Credit: Pre-paid account ex: Pre-paid insurance expense 500 Pre-paid insurance 500 Depreciation Adjusting Entry Debit: Depreciation Expense Credit: Accumulated Depreciation- ( fixed asset) Unearned Revenue *** turning unearned into earned revenue Debit: Unearned revenue (decrease liability) Credit: Revenue (Increase revenue) Accrued Revenue Debit: Accounts Receivable ( Did service, now billing customers) Credit: Revenue ( increasing revenue from completing services) Accrued Expense Debit: Expense Credit: Payable Post-Closing Trial balance doesn't include income statement accounts because they were closed Fixed assets