BAChapter 1
BAChapter 1
ACCOUNTING
Chapter 1
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Debit and Credit Mechanism
Account Type Increase on Decrease on Normal
Assets
Current Assets
1. Cash 4. Account Receivables
2. Inventories 5. Supplies
3. Prepaid Expense 6. Short Term Investments (< 1 year)
a. Prepaid Insurance 7. Notes Receivables (< 1 year)
b. Prepaid Rent, etc
Liabilities
Current Liabilities
1. Accounts Payable 4. Unearned Revenue
2. Expense Payable 5. Warranty Liabilities (< 1 year)
a. Utilities Payable 6. Notes Payable (< 1 year)
b. Salaries Payable, etc. 7. Accrued Liabilities *
3. Income Tax Payable *Basically same with Expense Payable
Equity
Share Capital
1. Ordinary Shares 2. Preference Shares
Retain Earnings
Accumulated profits that are not distributed to Shares
Preference SharesPreference share holders
Non-controlling Interest
Part of the subsidiary company's equity and is not owned by the parent company.
Basic Chart of Account
Different for every company
Assets
No. Account Name Increase on Decrease on Normal
The account name can be shuffled, but cash should always be the first one.
*Prepaid expense included rent, insurance, advertising, etc.
105 - Prepaid Rent 106 - Prepaid Insurance 107 - Prepaid Advertising
Liabilities
No. Account Name Increase on Decrease on Normal
Revenue
No. Account Name Increase on Decrease on Normal
Expenses
No. Account Name Increase on Decrease on Normal
Service Company
Companies whose main activity is making intangible products in the form of
services to make a profit.
General Journal
Media in the accounting process to accommodate transaction accounts
Daily records of company transactions
[Company Name]
General Journal
For the Month January 2024
[Company Name]
General Ledger
For the Month January 2024
Account Name Account Code
Balance
Date ref Description Debit Credit
Debit Credit
Transaction Date
In which account did Normal account on transaction
Transaction
the transaction occur?
Reference
On what journal this transaction would be found?
TRIAL BALANCE
Makes it easier to prepare financial reports
[Company Name]
Trial Balance
For the Month Ended, 31st January 2024
Jan 7 The company received 8,000 cash in exchange for services performed.
Jan 12 Felis Catus Co. performs 3,500 services for customers. The company received
cash of 1,500 from the customer, and the remainder was paid on credit.
Jan 22 Felis Catus Co. received 1,200 in cash from customers who had been billed for
services on January 12.
Cash 850
Cash 3500
Balance
Date ref Description Debit Credit
Debit Credit
Balance
Date ref Description Debit Credit
Debit Credit
Equipment 111
Balance
Date ref Description Debit Credit
Debit Credit
Balance
Date ref Description Debit Credit
Debit Credit
Balance
Date ref Description Debit Credit
Debit Credit
Balance
Date ref Description Debit Credit
Debit Credit
Balance
Date ref Description Debit Credit
Debit Credit
TUNED!
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