AFM101 Lecture Notes - Lecture 4: Share Capital, Cash Cash, Retained Earnings

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Unearned revenue: unearned revenue: used when a service is paid in advance. T-accounts: t-accounts: t-charts that represent their assigned account, account name is written on top of the t-account, debit (dr): the left side of a t-account, assets normally have a debit balance. Increases to asset accounts are added to the debit side: decreases to asset accounts are added to the credit side, credit (cr): the right side of a t-account. Increases to equity-increasing accounts are added to the credit side: decreases to equity-increasing accounts are added to the debit side, accounts that decrease equity (expenses, losses, sometimes dividends) Cr (1350 + 0) = (0 + 1350: 1350 = 1350, a = l + se (1350 + 0) = 0 + 1350, 1350 = 1350. Chart of accounts: a directory of every account used in a business, each account is numbered according to type. Expenses: cash, a/p, share capital, merchandise, rent expense, a/r, notes, retained.

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