ACC 221 UPDATED STUDY EXAMS GUIDE
QUESTIONS AND ANSWERS SURE A+
✔✔Depreciation - ✔✔-of long-term assets (use over a year)...plant, property,
equipment...deals w/ assets showing usage...make adjusting entry
-Monthly Depreciation=original cost/months of useful life
-debit depreciation expense, credit acc. depreciation
✔✔Accumulated Depreciation and Depreciation adj. entry procedure - ✔✔-contra-asset
account--always has credit account bc lowers total assets
-when making depreciation adj. entry: debit dep. expense, credit acc. depreciation
✔✔Book Value of an Asset - ✔✔*original cost-accumulated depreciation
-keep making adj. entries until book value=0
✔✔Prepaid Assets - ✔✔=supplies used longer than one accounting pd, also
insurance/rent being prepaid.
-adjusting entry: debit supplies expense, credit supplies
*know beginning balance before adj and know "should be" ending bal...calculate credit
amt
✔✔Accrued Liability - ✔✔-for wages, loan, rent...pay last 2 days of March in April...still
record in March...make adj. entry
, -March: debit wages expense, credit wages payable
-Apri: debit wages payable, credit cash
✔✔Unearned Revenue - ✔✔=liability account...when receiving payment in advance
-when it happens debit cash, credit unearned revenue
-adj. entry=does work: debit unearned revenue, credit service revenue=have beginning
bal and "should be" ending...calc credit amt
✔✔Accrued Assets and adj. entry procedure - ✔✔-earn revenue...pay later (no time to
invoice example)
-adj. entry: debit accounts receivable, credit service revenue
✔✔Dividends Payable - ✔✔-Dividends have no impact on income statement
-Dividends Payable=liability account used when dividend is declared and paid
✔✔Dividend Dates - ✔✔1. Date of Declaration: debit retained earnings, credit dividends
payable
2. Date of Record-get list-no transaction
3. Date of Payment-debit cash, credit dividends payable
**retained earnings current balance=beginning balance-dividend
✔✔Retained Earnings equation as it relates to dividends - ✔✔retained earnings current
balance=beginning balance-dividend
✔✔Transaction: borrow money from bank - ✔✔D-cash
C-note payable
*do not include interest rate yet
✔✔Transaction: Sale of common stock - ✔✔D-cash
C-common stock
✔✔Transaction:Purchase Equipment - ✔✔D- equipment
C-cash
✔✔Transaction: Purchase supplies on credit - ✔✔D-supplies expense
C- accounts payable
✔✔Transaction: Pay rent - ✔✔D- rent expense
C- cash
✔✔Transaction: sale both for cash and on credit - ✔✔SERVICE:
D-cash for amt paid today
D-accounts receivable for amount owed
C- service revenue
MERCH:
QUESTIONS AND ANSWERS SURE A+
✔✔Depreciation - ✔✔-of long-term assets (use over a year)...plant, property,
equipment...deals w/ assets showing usage...make adjusting entry
-Monthly Depreciation=original cost/months of useful life
-debit depreciation expense, credit acc. depreciation
✔✔Accumulated Depreciation and Depreciation adj. entry procedure - ✔✔-contra-asset
account--always has credit account bc lowers total assets
-when making depreciation adj. entry: debit dep. expense, credit acc. depreciation
✔✔Book Value of an Asset - ✔✔*original cost-accumulated depreciation
-keep making adj. entries until book value=0
✔✔Prepaid Assets - ✔✔=supplies used longer than one accounting pd, also
insurance/rent being prepaid.
-adjusting entry: debit supplies expense, credit supplies
*know beginning balance before adj and know "should be" ending bal...calculate credit
amt
✔✔Accrued Liability - ✔✔-for wages, loan, rent...pay last 2 days of March in April...still
record in March...make adj. entry
, -March: debit wages expense, credit wages payable
-Apri: debit wages payable, credit cash
✔✔Unearned Revenue - ✔✔=liability account...when receiving payment in advance
-when it happens debit cash, credit unearned revenue
-adj. entry=does work: debit unearned revenue, credit service revenue=have beginning
bal and "should be" ending...calc credit amt
✔✔Accrued Assets and adj. entry procedure - ✔✔-earn revenue...pay later (no time to
invoice example)
-adj. entry: debit accounts receivable, credit service revenue
✔✔Dividends Payable - ✔✔-Dividends have no impact on income statement
-Dividends Payable=liability account used when dividend is declared and paid
✔✔Dividend Dates - ✔✔1. Date of Declaration: debit retained earnings, credit dividends
payable
2. Date of Record-get list-no transaction
3. Date of Payment-debit cash, credit dividends payable
**retained earnings current balance=beginning balance-dividend
✔✔Retained Earnings equation as it relates to dividends - ✔✔retained earnings current
balance=beginning balance-dividend
✔✔Transaction: borrow money from bank - ✔✔D-cash
C-note payable
*do not include interest rate yet
✔✔Transaction: Sale of common stock - ✔✔D-cash
C-common stock
✔✔Transaction:Purchase Equipment - ✔✔D- equipment
C-cash
✔✔Transaction: Purchase supplies on credit - ✔✔D-supplies expense
C- accounts payable
✔✔Transaction: Pay rent - ✔✔D- rent expense
C- cash
✔✔Transaction: sale both for cash and on credit - ✔✔SERVICE:
D-cash for amt paid today
D-accounts receivable for amount owed
C- service revenue
MERCH:
