ACCT 2331 Formulas & Other Information for Exam 1
Balance Sheet Formula & Accounting Equation Formula Assets = Liabilities + Stockholders' Equity
Expanded Accounting Equation
Assets = Liabilities + Contributed Capital + Retained Earnings + Revenues - Expenses -- Dividends
Income Statement Formula
Revenues - Expenses = Net Income (OR Net Loss if Expenses > Revenues)
Calculate Ending Retained Earnings on Statement of Stockholders' Equity Beg Retained Earnings + Net Income - Net Loss - Dividends = End Retained Earnings
Statement of Stockholders' Equity Beg SE + Issuance of Stk + Net Inc - Net Loss - Div = End SE
OR
Adjusting Journal Entry for Supplies, a Prepaid
Supplies Used is the amount in the following Adjusting Journal Entry
Supplies Expense Supplies
Adjusting Journal Entry for Interest Expense or Interest Revenue--AcCRUAL Interest = Face Amount x Interest Rate x Time Period (Time Period is a portion of a year)
Interest Expense Interest Pay
OR
Interest Receivable Interest Revenue
Adjusting Journal Entry for Depreciaiton
Straight-line Depreciation =
Cost - Salvage Estimated Useful Life
Depreciation Expense Accumulated Depreciation
Adjusting Journal Entry for Prepaid
$ Amount of Prepaid # of Months it is for
=$ Amount Used up/Month
$ Amt Used up/Month x # of Months used up = $ Amt of Expense in Adj JE
Rent/Ins/Advert Expense Prepaid Rent/Ins/Advert
Adjusting Journal Entry for Deferred/Unearned Revenue
$ Amount Received in Advance.= $ Amt to be Earned/Month # of Month Cash is For
$ Amt to be Earned/Month x # of Month Passed = Tot Amt Earned in Adj JE
Deferred/Unearned Revenue Service Revenue
Statement of Cash Flows Formula Cash Flows from Operating Activities +/- Cash Flows from Investing Activities +/- Cash Flows from Financing Activities Net Increase (Decrease) in Cash + Beginning Cash balance Ending Cash Balance (Amount shown on the Balance Sheet)
DEA LOR Incr with DR Incr with CR
Decr with CR
Decr with DR
D = Dividends E = Expenses A= Assets
L = Liabilities O = Owners' Equity (Stock & Ret Earn)
R = Revenues
"On Account" or "For Credit" means Accounts Receivable (if related to a revenue)
OR Accounts Payable (if related to a purchase)
Current Asset is an asset that is expected to be converted to Cash or "Used Up" within the next year or operating cycle, whichever is LONGER. Since the Operating cycle is typically 120-180 days, we will use the year.
LONG Term Assets are Buildings, Machinery, Equipment, Land, Notes Receivable
Current Liability is a liability that is due within the next year or Operating Cycle, whichever is LONGER.
LONG Term Liabilities Notes Payable
Cost of Fixed Asset - Accumulated Depreciation = Book Value
NORMAL balance of an account is how you INCREASE that account.
Permanent accounts are the accounts found on the Balance Sheet ---- Assets, Liabilities, Contributed Capital (Stock account) and Retained Earnings
Temporary accounts are found on the Income Statement ---- Revenues & Expenses--- AND Dividends All temporary accounts are zeroed out at the end of the accounting period
Record i