Exam 1 Review :
sole proprietorship : owned by 1
person (unlimited lability
Need to know difference private/public company
Separate Entity :
Assets :
Liabilities: Creditor's claim to
Revenues -
Expenses = Net Income
Account Titles
Statement of Retained Earnings : Beginning Dividends Retained Earnings
+ Net Income =
Ending
-
Assets listed
are in
liquidity
:
Operating
Investing:
Financing:
Chapter 2 : Review (Balance Sheet)
Equity financing:
Debt financing:
"Double entry" : Company always receives something
Cost principle:
External
Internal
Page 14 : Chapter a Study H!
Chapter 3 : review (Income Statement)
Revenues :
Expenses :
Net Income:
Time period assumption :
Cash basis accounting:
Accrual basis
accounting:
The expanded equation:
This study source was downloaded by 100000900703063 from CourseHero.com on 02-21-2026 08:00:38 GMT -06:00
, Practice problems :
1. $(6000) debit Account receivable (credit)
$(500) debit
2 . Deferred revenue (credit) (a liability
3
. Accounts receivable Service revenue
4
.
Salaries/wages payable cash
5. Rent Cash
5
Expense
Revenue Recognized
Recognized Expense
1 .
$0 1 . $1 000
,
2 $10 ,000 .
2 . $0
3
. $8 .
3 $0 Prepaid Rent
,
4. $500 4 .
$200
5 $0 . $0 distributions not expenses
.
lequity 5 ,
Skill 6:
Assets = Liabilities +
SE
Not imbalance !
b Increase assets.
,
decrease liabilities
. Decrease
2
assets ,
increase stockholder's equity
Assets : $900,000 11 $300 000 Assets= Liabilities+ Common Stock+ Retained
,
Earnings
liabilities : $500 000 ↓ $80 , 000 900 ,000 500 000 ?
,
, 250 ,000
↑$ 150 000
Common Stock: $250 , 000 20 , 000
⑮
+
-
, 300, 000 -
+ 150 , 000
#
Net Income 1 , 200 , 000 420,000 400, 000
⑳ , 000
Ending Re =
Beg RE + Net Income Dividends -
Net Income = End
RE-Beg RE + Dividends
h
350 , 000 -
150 , 000 + O
230 , 000
This study source was downloaded by 100000900703063 from CourseHero.com on 02-21-2026 08:00:38 GMT -06:00
sole proprietorship : owned by 1
person (unlimited lability
Need to know difference private/public company
Separate Entity :
Assets :
Liabilities: Creditor's claim to
Revenues -
Expenses = Net Income
Account Titles
Statement of Retained Earnings : Beginning Dividends Retained Earnings
+ Net Income =
Ending
-
Assets listed
are in
liquidity
:
Operating
Investing:
Financing:
Chapter 2 : Review (Balance Sheet)
Equity financing:
Debt financing:
"Double entry" : Company always receives something
Cost principle:
External
Internal
Page 14 : Chapter a Study H!
Chapter 3 : review (Income Statement)
Revenues :
Expenses :
Net Income:
Time period assumption :
Cash basis accounting:
Accrual basis
accounting:
The expanded equation:
This study source was downloaded by 100000900703063 from CourseHero.com on 02-21-2026 08:00:38 GMT -06:00
, Practice problems :
1. $(6000) debit Account receivable (credit)
$(500) debit
2 . Deferred revenue (credit) (a liability
3
. Accounts receivable Service revenue
4
.
Salaries/wages payable cash
5. Rent Cash
5
Expense
Revenue Recognized
Recognized Expense
1 .
$0 1 . $1 000
,
2 $10 ,000 .
2 . $0
3
. $8 .
3 $0 Prepaid Rent
,
4. $500 4 .
$200
5 $0 . $0 distributions not expenses
.
lequity 5 ,
Skill 6:
Assets = Liabilities +
SE
Not imbalance !
b Increase assets.
,
decrease liabilities
. Decrease
2
assets ,
increase stockholder's equity
Assets : $900,000 11 $300 000 Assets= Liabilities+ Common Stock+ Retained
,
Earnings
liabilities : $500 000 ↓ $80 , 000 900 ,000 500 000 ?
,
, 250 ,000
↑$ 150 000
Common Stock: $250 , 000 20 , 000
⑮
+
-
, 300, 000 -
+ 150 , 000
#
Net Income 1 , 200 , 000 420,000 400, 000
⑳ , 000
Ending Re =
Beg RE + Net Income Dividends -
Net Income = End
RE-Beg RE + Dividends
h
350 , 000 -
150 , 000 + O
230 , 000
This study source was downloaded by 100000900703063 from CourseHero.com on 02-21-2026 08:00:38 GMT -06:00
