ACCY 1 Notes 10/24 PDF

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First test will cover chapters 1,2,3 and the first learning objective of chapter 4

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record business transactions using journal entries, post these entries to general ledgers, construct a trial balance, prepare financial statements, close revenues, expenses and dividends accounts

Furthermore, a student is expected to be able to ● ●

record purchase of inventories record sales of inventories

Chapter 1- Accounting equations -What’s considered assets, liability and stockholder equity

Chapter 4- Accounting for merchandising business -Record and report on inventory transactions Merchandising business generates Product Costs- Costs that are included in inventory Selling Admin costs- Costs that are not included in inventory. They are sometimes called period costs

Beginning Inventory Balance + Inventory Purchased During the Period = Cost of Goods Available for Sale Gross Margin= Sales Revenue - Cost of Goods Sold Gross Margin does not equal net income Perpetual Inventory System When companies purchase inventory using a perpetual inventory system, they increase the Inventory system, they increase the inventory account and either decrease Cash or increase Accounts Payable When companies sell inventory, they make two entries: -They increase an asset account (Cash or Accounts Receivable) and increase Sales Revenue, -they increase Costs of Goods Sold and decrease Inventory Always credit sales revenue Reduce invetory...