MIS 302F Lecture Notes - Lecture 2: Common Stock, Financial Statement

• School: UT-Austin
• Department: Management Information Systems
• Course: MIS 302F
• Professor: Tuttle Clint

Document Summary

Softbyte inc. purchases computer equipment for ,000 cash. This transaction results in an equal increase and decrease in total assets, though the composition of assets changes. Softbyte inc. purchases for ,600 from acme supply company computer paper and other supplies expected to last several months. This transaction is a purchase on account (a credit purchase). Assets increase because of the expected future benefits of using the paper and supplies, and liabilities increase by the amount due acme. This total is matched by a ,600 creditor"s claim and a ,000 ownership claim. Softbyte inc. receives ,200 cash from customers for programming services it has performed. The two sides of the equation balance at ,800. Service revenue is included in determining softbyte"s net income. Note that we do not have room to give details for each individual revenue and expense account in this illustration.