Accounting Fundamentals

Card Set Information

Author:
pmc101
ID:
76985
Filename:
Accounting Fundamentals
Updated:
2011-04-04 15:52:48
Tags:
Accounts
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Description:
Various Accounts and their expected entries
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  1. Sales
    • Type: Income
    • Entry: Credit
    • Double Entry: Debit Receivables
  2. Sales Returns
    • Type: Like an Expense
    • Entry: Debit
    • Double Entry: Credit Receivables
  3. Purchases
    • Type: Expense
    • Entry: Debit
    • Double Entry: Payables
  4. Purchase Returns
    • Type: Like and income
    • Entry: Credit
    • Double Entry: Payables
  5. Discount Received
    • Type: Like an income
    • Entry: Credit
    • Double Entry: Payables

    A discount received is equivelant to an income as it reduces the liability therefore we debit the Payables liability and credit the discount received
  6. Discount Allowed
    • Type: Expense
    • Entry: Debit
    • Double Entry: Receivables

    A discount allowed is like and expense as it reduces the asset so we credit receivables and debit discount allowed
  7. Prepayment
    • Type: Asset
    • Entry: Debit
    • Double Entry: Credit the expense which was prepaid

    A prepayment is an asset from which the company will derive benefit in a subsequent period and therefore should be carried forward as an asset
  8. Accrual
    • Type: Liability
    • Entry: Credit
    • Double Entry: Debit the expense being accrued

    Payment must be made in the period in which benefit is derived. In the event we don't have an invoice we would estimate the cost of goods or services already received
  9. Receivables
    • Type: Asset
    • Entry: Debit
    • Double Entry: Various (Sales related)

    Remeber: SETS Dr Sale, Cr Everything that Takes from Sales
  10. Payables (Control Account)
    • Type: Liability
    • Entry: Credit
    • Double Entry: Various (Purchases Related)

    Remember (ETPP - eatey pee pee) Dr Everything that Takes from Purchases, Cr Purchases
  11. Receivables (Subsidiary Ledger)
    AKA - Personal Account of Customer
    • Type: Asset
    • Entry: Debit

    The receivables Ledger is not part of the double entry system. A Debit balance is expected
  12. Payables (Subsidiary Ledger)
    aka - Personal Account of Supplier
    • Type: Liability
    • Entry: Credit

    The payable ledger is not part of the double entry system. A Credit balance is expected

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