ACCT - SUMMARY NOTES OF COST ACCOUNTING
Transaction - ✔️
✔️An even that affects the financial position of the
company
External
ex: Purchasing supplies form vendors
Internal
ex: using supplies on hand
Analysis - ✔️
✔T️
o determine the impact of a transaction on the accounting
equation
What is the Accounting Equation? - ✔️
✔A️ssets = Liabilities +
Stockholders' Equity
The basic accounting is always in balance
How does the Accounting Equation remain balanced? - ✔️ ✔️ Any
transaction will have a dual effect so that the accounting equation remains in
balance. therefore, at least two accounts will be affected by every
transaction
T-Accounts - ✔️ ✔A️visualization of the balance in a single account.
Increases to the account are shown on one side of the "T" and decreases are
shown on the other.
How do you calculate the ending balance on a T-account - ✔️ ✔️find
the sum of the debit and credit and find the difference between the two
,What goes on the left side for a T-account? - ✔️
✔D️ebit
What goes on the right side of a T-account? - ✔️
✔C️redit
Asset Accounts - ✔️
✔I️
ncreases on the debit (left) side
Decreases on the credit (right) side
Liability and Stock Holders Equity Accounts - ✔️
✔️Increases on the
credit (right) side
Decreases on the debit (left) side
Journal - ✔️
✔a️Journal is a chronological record of all transaction affecting a
firm
Journal Entry - ✔️ ✔S️hows the specific accounts that are debited and
credited for a give transaction
General Ledger - ✔️ ✔a️record of each account in the company's chart of
the accounts. Each account has tis own page or electronic recording.
Posting - ✔️ ✔e️ ach "side" of the entry is transferred to the page or record
for the account that is debited or credited.
Trial Balance - ✔️ ✔A ️list of all the accounts and their balances, used for
internal purposes to verify that the total of all accounts with ending debit
balances is equal to the total of all accounts with credit balances.
Order of Accounts - ✔️
✔️Assets
, Liabilities
Stockholders’ Equity
Dividends
Revenues
Expenses
The Accounting System - ✔️
✔1️. use source documents to identify
transactions
2. analyze the impact of the transaction on the accounting equation
3. Determine which account is debited and which credited
4. Record the transaction in a journal entry
5. post the transactions from journal entries to the general ledger for the t-
accounts
6. Prepare a trial balance
7. Prepare financial statement
Purchase equipment in exchange for cash of $23,400 - ✔️
✔️Debit-
Equipment
Credit- Cash
Provide services to customers and receive cash of $6,800 -
✔️✔D️ebit-Cash
Credit-Service Revenue
Pay the current month's rent of $1,300 - ✔️
✔️Debit-Rent Expense
Credit-Cash
Transaction - ✔️
✔️An even that affects the financial position of the
company
External
ex: Purchasing supplies form vendors
Internal
ex: using supplies on hand
Analysis - ✔️
✔T️
o determine the impact of a transaction on the accounting
equation
What is the Accounting Equation? - ✔️
✔A️ssets = Liabilities +
Stockholders' Equity
The basic accounting is always in balance
How does the Accounting Equation remain balanced? - ✔️ ✔️ Any
transaction will have a dual effect so that the accounting equation remains in
balance. therefore, at least two accounts will be affected by every
transaction
T-Accounts - ✔️ ✔A️visualization of the balance in a single account.
Increases to the account are shown on one side of the "T" and decreases are
shown on the other.
How do you calculate the ending balance on a T-account - ✔️ ✔️find
the sum of the debit and credit and find the difference between the two
,What goes on the left side for a T-account? - ✔️
✔D️ebit
What goes on the right side of a T-account? - ✔️
✔C️redit
Asset Accounts - ✔️
✔I️
ncreases on the debit (left) side
Decreases on the credit (right) side
Liability and Stock Holders Equity Accounts - ✔️
✔️Increases on the
credit (right) side
Decreases on the debit (left) side
Journal - ✔️
✔a️Journal is a chronological record of all transaction affecting a
firm
Journal Entry - ✔️ ✔S️hows the specific accounts that are debited and
credited for a give transaction
General Ledger - ✔️ ✔a️record of each account in the company's chart of
the accounts. Each account has tis own page or electronic recording.
Posting - ✔️ ✔e️ ach "side" of the entry is transferred to the page or record
for the account that is debited or credited.
Trial Balance - ✔️ ✔A ️list of all the accounts and their balances, used for
internal purposes to verify that the total of all accounts with ending debit
balances is equal to the total of all accounts with credit balances.
Order of Accounts - ✔️
✔️Assets
, Liabilities
Stockholders’ Equity
Dividends
Revenues
Expenses
The Accounting System - ✔️
✔1️. use source documents to identify
transactions
2. analyze the impact of the transaction on the accounting equation
3. Determine which account is debited and which credited
4. Record the transaction in a journal entry
5. post the transactions from journal entries to the general ledger for the t-
accounts
6. Prepare a trial balance
7. Prepare financial statement
Purchase equipment in exchange for cash of $23,400 - ✔️
✔️Debit-
Equipment
Credit- Cash
Provide services to customers and receive cash of $6,800 -
✔️✔D️ebit-Cash
Credit-Service Revenue
Pay the current month's rent of $1,300 - ✔️
✔️Debit-Rent Expense
Credit-Cash
