MGT120H5 Lecture Notes - Lecture 4: Accrued Interest, Debt Ratio, Current Liability
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MGT120H5 Full Course Notes
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Normal balance for assets, expenses, and dividends is debit, all other accounts (liability, equity, Receiving money for service (sale) credit. Paying off expense (salary) increases liability (accounts payable) 1) entity has cash: purchase of inventory. 2) entity holds inventory: sale of inventory. 3) entity has a receivable: collection of receivable. 6) adjust records to make sure all income and expenses are reported for period journalize in general journal: post to individual accounts, *students have most difficulty with adjusting records. Closing entries transfer revenue, expenses, and dividends balances to retained. Earnings: permanent account assets, liabilities, shareholder"s e(cid:395)uity are not closed at end of period because their balances are not used to measure income. 10) (optional) prepare a post closing trial balance. Regardless of when cash is received or paid. Record everything: cash and noncash transactions. Purchase of inventory on account/sales on account. Expenses used but not yet paid/revenue earned but not yet received.
