Examine how straightforward forms of financing (personal equity, bank loans) and equipment obtained through the business are recorded in the books.
- [Instructor] You're 18 again, and you want to … work outdoors and set your own schedule. … So, let's start our own landscaping business. … Okay, your first task in starting … this business is to acquire cash, … either through owner's investment or by borrowing. … Now, remember, you're 18 again. … You got a full head of hair and a million ideas. … You're ready to make some money. … You have $1,000 in savings, … and your parents have offered to match your funds. … You decide to issue 200 shares of stock. … You make this journal entry. … This transaction increases Cash as a result … of capital stock being issued to investors or stockholders. … The Cash account is debited … because an asset, cash, increased. … And the Capital Stock account is credited. … Remember, Owner's Equity accounts … are increased with credits. … The economic impact of this situation … may be summarized as follows in the accounting equation. … Note from the journal entry … that our debits equaled our credits. … And note from the spreadsheet that our assets …
- Identify how a balance sheet reflects the accounting equation.
- Name the account where debits are increases and credits are decreases.
- Define a journal.
- List the three things, in order, that you must address when making journal entries.
- Explain the function of financial statements that is most important for entrepreneurs.
- Assess the purpose of a trial balance.
Skill Level Beginner
1. Review of the Financial Statements
2. Fours Steps in the Bookkeeping Process
3. How Transactions Affect the Accounting Equation
4. The General Ledger
5. Illustration of the First Three Steps in the Accounting Cycle
The role of computers3m 44s
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