BSB110 Notes

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Management and Human Resources
All Professors

Rebecca Reaburn Lecture Notes Accounting Lecture 2  recognizing services = revenue  expenses reduce net profit and owners equity  income statements tell us how well a business is doing for a specific period  balance sheets tell us how well a business is doing at a specific date (AS AT ....)  To do an income statement you will need revenue and expenses  LIABILITIES = CREDIT  OWNERS EQUITY = CREDIT  REVENUE = CREDIT  ASSETS = DR  EXPENSES = DR  increases to amounts are recorded on the same side as the nature of the account  decreases to amounts are recorded on the opposite side as the nature of the account  an entry has to effect at least two sides of the ledger  DEBIT HAS TO = CREDIT  Net profit is made up of Revenue and Expenses  pre-paid things (insurance, rent etc) are assets not expenses  if someone pays in advance this is a liability because we can't call it revenue until the service is performed Lecture 3  5 types of adjustments o Prepaid expense EG prepaid insurance  DR ... expense  CR prepaid ... (asset) o Depreciation  DR depreciation expense - name of asset  CR accumulated depreciation - name of asset o Accrued Expenses EG wages  DR ...expense  CR ... payable (liability) o Accrued Revenues EG interest on term deposit  DR ...receivable (asset)  CR ...revenue o Unearned Revenues EG fees received in advance for services  DR Unearned ... (liabilit
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