基础会计双语教案

课程教案

2014—2015学年第三学期

课程名称：会计英语

课程性质：必修课

授课班级：涉外会计

授课教师：杨蜜

教师所属系（部）：商贸系

总学时：40

周学时：2

PartiBasicofaccounting

教学方法：讲授法、实例法

教学目的：

♦掌握资产、负债和所有者权益的会计含义

♦掌握复式记账、货币计量、会计实体、持续经营以及资产计量原则

♦熟悉资产负债表的特征

♦了解资产负债表的主要科目

重点和难点：

重点：

l.Fourbasicfinancialstatements

2.Sixelementsofaccounting

3.Conceptsthatgovernallaccounting

难点：

1.Conceptsthatgovernallaccounting

学时分配：4课时

讲课4课时

参考书目：

1、《基础会计》2006年7月第2版金跃武主编高等教育出版社

2、《企业会计准则》（财政部文件）2006年中国财政经济出版社

3、《基础会计与实务》2005年7月第2版李惠芝主编清华大学出版社

4、《基础会计》2005年7月第2版薛洪岩主编立信会计出版社

5、《初级会计实务》（全国会计专业技术资格考试用书）2004年9月第1版中

国财政经济出版社

Part1Basicofaccounting

1.WhatisaccountinganditsroleinBusiness

Accountingbranches

2.Financialstatements

■Balancesheet

■Incomestatement

■Statementofcashflows

■Statementofchangesinequity

Assets

■Assetsarevaluableresourcesownedbytheentity.

■Liabilitiesandequityshowthesourcesofassets.

Liabilities

■Liabilitiesaretheentity'sobligationstooutsidepartieswhohavefurnishedresources.

■Creditors——whohaveaclaimagainsttheassetsintheamountshownastheliabilities.

Equity

■Paid-incapital:providedbyequityinvestors

■Retainedearnings:generatedfromprofits

■Equityinvestorshaveonlyaresidualclaim.

3.Conceptsthatgovernallaccounting(会计核算的基本概念)

(1)Thedual-aspectconcept

复式记帐概念

Thefundamentalaccountingequation:

Assets=Liabilities+Equity

复式记帐特点

/在两个或两个以上相互联系的账户中记录一项经济业务，以反映资金运动的来龙去脉。

/以相等的金额记入相应的账户，以便于检查账簿记录的正确性。

(2)Themoney-measurementconcept货币计量

Accountingreportsonlyfactsthatcanbeexpressedinmonetaryamounts.

(3)Theentityconcept会计实体

Abusinessisanentity;acollege,agovernment,achurcharealsoentities.

(4)Thegoing-concernconcept持续经营

Accountingassumethatanentitywillcontinuetooperateindefinitelyunlessthereis

evidencetothecontrary.

■Becauseofthegoing-concernconcept,accounting[does/doesn^]reportwhattheassetscouldbe

soldforiftheentityceasetoexist.

4.Conceptsthatgovernallaccounting

■(5)Theasset-measurementconcept资产计量

Ifreliableinformationisavailable,anassetismeasuredasitsfairvalue.

Thefairvalueofmostassetsisknownonthedatetheassetwasacquiredbecausethebuyer

andtheselleragreedontheamount.

■Ingeneral,assetssuchasland,buildings,equipment,andinventorieshavethischaracteristic:

■Theirfairvaluecan'tbereliablymeasuredexceptatthetimetheywereacquired.

■Theyarereportedatcostoranumberbasedoncost.

■Theassets-measurementconceptcombinesbothtypesofassets:

■Ifreliableinformationisavailable,theamountofanassetismeasuredatits;otherwise

themeasurementisbasedonits.

Whymeasuringassetsatcost?

■Estimatingfairvalueofeachassetmaybeexpensiveandunreliable.

■Manyassetsarenotgoingtobesoldinthenearfuture.Theentityandthosewhouseitsbalance

sheetthereforedon'tneedtoknowthefairvalueoftheseassets.

■Monetaryassets,forexample,cash,securitiesandbonds,arethosethathaveaclaimona

specifiedamountofmoney.

■Land,buildings,equipmentandinventoryarenonmometaryassets.

■ingeneral,monetaryassetsarereportedat;

■Nonmonetaryassetsarereportedat.

■Thedual-aspectconcept:

■=+

■Themoney-measurementconcept:

■Accountingreportsonlythefactsthatcanbeexpressedin.

■Theentityconcept:

■Accountingarekeptforthe.

■Thegoing-concernconcept:

■Accountingassumesthatanentitywill.

■Theasset-measurementconcept:

■Accountingfocusontheofmonetaryassetsandontheofnonmonetaryassets.

BalanceSheetItems

■Mostitemsonabalancesheetaresummariesofmoredetailedaccounts.

■Forexample,thecashisprobablylocatedinanumberofseparatebankaccounts,incash

registersandinpettycashboxes.

Assets

■Inordertocountasanassetinaccounting,anitemmustpassthreetests:

1)mustbecontrolledbytheentity;

2)mustbevaluabletotheentity;

3)musthavebeenacquiredatameasurablecost.

■IfAbleCompanyrentsabuildingownedbyBakerCompany,thisbuildingisanassetof

■Theemployeesofanentity[are/aren,t]assets.

■Ifabaseballclubownsacontractinwhichaplayeragreestoprovidehisservices,thecontract

[is/isn't]anasset.

■IfJonesCompanyhasbuiltupanexcellentreputationbecauseoftheconsistentlyhighqualityof

itsproducts,thisreputation[is/isn't]anassetsinaccounting.

■Whichofthesewouldqualifyasassetsofacompanythatsellsdresses?

A.Thecompany'srighttocollectamountsowedbycustomers.

B.Regulardressesheldforsale.

C.Dressesthatnoonewantsbecausetheyhavegoneoutofstyle.

D.Acashregisterinworkingcondition.

E.Acashregisterthatdoesn'tworkandcan'tberepaired.

Assets

■Cashandotherassetsthatareexpectedtobeconvertedintocashorusedupinthenearfuture,

usuallywithinoneyear,arecurrentassets.

■Assetsthatareexpectedtobeusefulforlongerthanonefutureyeararecallednoncurrentassets.

Liabilities

■Liabilitiescanberegardedeitherasclaimsagainsttheassetsorasoneofsourcesfromwhichthe

assetswereacquired.

Liabilities

■Currentliabilitiesareclaimsthatbecomeduewithina[short/long]time,usuallyin________.

■Noncurrentliabilitiesduewithina[short/long]time,usuallyin________.

CurrentRatio

■Thecurrentassetsandcurrentliabilitiesindicatetheentity'sabilitytomeetitscurrent

obligations——CurrentRatio.

thecurrentratio=currentassets/currentliabilities

acurrentratioofatleast2to1isdesirable.

Equity

■Equityconsistsofcapitalobtainedfromsourcesthatarenotliabilities.

■Therearetwosourcesofequitycapital:

1)TotalPaid-inCapital

2)RetainedEarnings

Paid-inCapital

■Paid-inCapitalistheamountofcapitalsuppliedbyequityinvestors.Theequityinvestors

receivesharesofstockasevidenceoftheirownership.

■ThePaid-inCapitalisreportedas:

■Commonstock

■AdditionalPaid-inCapital

RetainedEarnings

■RetainedEarningsrepresentsthoseamountsthathavebeenretainedintheentityafterpartofthe

company'searningshavebeenpaidtoshareholdersintheformofdividends.

■RetainedEamings=-

2BalanceSheetChanges

教学方法：讲授法、实例法

教学目的：

♦掌握资产负债表中主要科目的含义

♦熟悉、掌握交易对资产负债表的影响

♦熟悉收入、费用和利润的概念

♦了解利润表的特征

重点和难点：

重点：

1.Themeaningoftheprincipalitemsreportedonabalancesheet;

2.Howseveraltypesoftransactionschangetheamountsreportedonthe

balancesheet;

3.Thenatureofincome.

难点：

1、Howseveraltypesoftransactionschangetheamountsreportedonthebalancesheet

学时分配：6课时

讲课6课时

参考书目：

6、《基础会计》2006年7月第2版金跃武主编高等教育出版社

7、《企业会计准则》（财政部文件）2006年中国财政经济出版社

8、《基础会计与实务》2005年7月第2版李惠芝主编清华大学出版社

9、《基础会计》2005年7月第2版薛洪岩主编立信会计出版社

10、《初级会计实务》（全国会计专业技术资格考试用书）2004年9月第1版中

国财政经济出版社

1.ReviewPart

•Securitiesarestocksandbonds.Theygivevaluablerightstotheentitythatownsthem,suchas

TreasuryBonds.

・Marketablesecuritiesarethatareexpectedtobeconvertedintocashwithinayear.

•^Investmentinsafe,veryshort-termfunds,suchasmoneymarketfunds,areoftenincludedin

thecashitemratherthaninmarketablesecurities.Theitemisthencalled“cashandcash

equivalents^^.

•Accountreceivableisanamountthatisowedtothebusiness,usuallybyoneofitscustomers,as

aresultoftheordinaryextensionofcredit.

•Example:acustomer'smonthlyelectricbill

•Inventoriesaregoodsbeingheldforsale,aswellassupplies,rawmaterialsandpartiallyfinished

productsthatwillbesolduponcompletion.

•Atruckownedbyanautomobiledealerforresaletoitscustomersisinventories.[T/F/Notgiven]

•Atruckownedbyanentityandusedtotransportitsowngoodsisinventories.[T/F/Notgiven]

TangibleAssets&IntangibleAssets

TangibleAssets-havephysicalsubstance,canbetouched(Inventory,Plant,Equipment,

Buildings,Trucks,Machines,etc.)

IntangibleAssets-havenophysicalsubstance,can'tbetouched(PatentsandTrademarks,

Goodwill,etc.)

*Afireinsurancepolicythatprotectstheentityagainstlossescausedbyfiredamage[is/isn't]an

asset.

•Andbecausethepolicycoversonlyashortperiodoftime,theassetisa[current/noncurrent]

asset.

•Theinsurancepolicyhavenophysicalsubstance,exceptasapieceofpaper,soitisa(an)

_________asset.

•PrepaidExpenseisthenameforintangibleassetsthatwillbeusedupinthenearfuture.Theyare

intangiblecurrentasset,suchasprepaidinsurancepolicy.

NoncurrentAssets

•Noncurrentassetsareexpectedtobeusedintheentityformorethan.(howlong)

•Property,PlantandEquipmentare.BalanceSheetshowsthe[cost/fairvalue]of

noncurrentassets.

•Exhibit1alsoshowsthataportionofthecostofthisassethasbeensubtractedfromtheoriginal

costbecauseithasbeen"usedup”.This"used-up"portioniscalledandtotals

$.

•Afterthisamountissubtracted,theassetamountisshownas$.Thisistheamountofcost

that[has/hasnot]beenusedup.

•Int6NoncurrentAssets”,wecanfind“Investment”.TheInvestmentsitemconsistsofsecurities,

suchasbonds.EvidentlyGarsdenCompanydoesnotintendtoturntheseinvestmentsintocash

within_______(howlong?).

•Ifthesesecuritieswereexpectedtobeturnedintocashwithinthatperiod,theywouldbelisted

asacurrentasset,M.

•PatentsandTrademarksarerightstousepatentsandrightstovaluablebrandnamesorlogos.

Theyareassetsbecause:

•1.theyare;

*2.theyarebyGarsdenCompany;

>3.theyareacquiredatameasurable.

•Goodwillariseswhenonecompanybuysanothercompanyandpaysmorethanthevalueofits

netidentifiableassets.GradyCompanyboughtBakerCompany,paying$1,400,000cash.Baker

Company'sidentifiableassetswerejudgedtobeworth$1,500,000,andGradybecame

responsibleforBaker9sliabilities,whichtotaled$500,000.

•Baker?sidentifiableassets$

•lessliabilities

•Netidentifiableassets

•GradypaidBaker$1,400,000

•Therefore,goodwillwas

Currentliabilities

Currentliabilitiesareobligationsdueinthenearfuture,usuallywithinoneyear.

,AccountsPayable

•BankLoanPayable

•AccruedLiabilities

•AccountsPayablearetheoppositeofAccounts;thatistheyareamountsthat[the

companyowestoitssuppliers/areowedtothecompanybyitscustomers].

•SmithCompanysoldapersonalcomputertoBrownCompanyfor$3,000.BrownCompany

agreedtopayforitwithin60days.InBalanceSheet,SmithCompanywouldreportthe$3,000

asAccountsandBrownCompanywouldreporttheamountasAccounts.

•BankLoanPayableisreportedseparatelyfromAccountsPayablebecausethedebtisevidenced

byapromissorynote.

*Amountsowedtoemployeesandothersforservicestheyhaveprovidedforwhichtheyhave

notbeenpaidarelistedasAccruedLiabilities.

•EstimatedTaxLiabilityistheamountowedtothegovernmentfortaxes.Therearetworeasons

forshowingitseparatelyfromotherliabilities:

9l.theamountislarge;

・2.theexactamountowedmaynotbeknownasofthedateofthebalancesheet.

•Itisacurrentliabilitybecausetheamountisduewithin________.

•TherearetwoitemsifLong-termDebtshownasliabilitiesinthebalancesheet.Oneislabeled

“currentportion”,becauseitisduewithin.

•Theotherislisted"noncurrentportion^^.Thispartdoesn'tbecomedueuntilafter.

•Althoughasingleliabilitymayhavebothacurrentportionandanoncurrentportion,asingle

assetisnotalwayssodivided.

Equity

,Paid-inCapital:theamountprovidedbyequityinvestors-isrepresentedbysharesof

stock

,RetainedEarnings:theamountofincomethathasbeenretainedintheentity.-Itisnot

cash;itispartoftheowner'sclaimontheassets.

2.BalanceSheetChanges

•Theamountsofassets,liabilitiesandequityofanentity[remainconstant/changefromdayto

day].Thereforetheamountsshownonitsbalancesheetalso[remainconstant/change].

•Eacheventthatisrecordedintheaccountingrecordsiscalledatransaction.

•Cashismoneyonhandandmoneyinbankaccountsthatcanbewithdrawnatanytime.On

January2,ifJohnSmithdeposited$8,500inthebankinsteadof$10,000andkept$1,500inthe

cashregister,itscashatthecloseofbusinessonJanuary2wouldbe.

•Amountsonabalancesheetarelistedaccordingtothecurrency.Generally,theitemwiththe

mostcurrentislistedfirst.

•Long-termDebt

•AccountsPayable(duein60days)

•BankLoanPayable(duenextOctober)

•Whenanentityborrowsmoney,itmaysignawrittenpromisetorepay.Suchawrittenpromiseis

termedanote.Forexample,ifBusinessAborrowsmoneyfromBusinessB,signinganote,

BusinessAwillrecorda[notereceivable/notepayable]onitsbalancesheet,whileBusinessBwill

recorda.

•Asweknowthatprofitableoperationsresultinanincreaseinequity,specificallyintheitem

R.

•Example:

•OnJanuary3,GlendaleMarketborrowed$5,000cashfromabank,givinganotetherefore.

•OnJanuary4,GlendaleMarketpurchasedreceivedinventorycosting$2,000,payingcash.

•OnJanuary5,GlendaleMarketsoldmerchandisefor$300,receivingcash.Themerchandisehad

cost200.(RetainedEarnings)

•OnJanuary6,GlendaleMarketpurchasedmerchandisefor$2,000andaddedittoitsinventory.

Itagreedtopaythevendorwithin30days.(AccountsPayable)

•OnJanuary7,merchandisecosting$500wassoldfor$800,whichwasreceivedincash.

•OnJanuary8,merchandisecosting$600wassoldfor$900.Thecustomeragreedtopay$900

within30days.(AccountsReceivable)

•OnJanuary9,GlendaleMarketpurchasedaone-yearinsurancepolicyfor$200,payingcash.

(PrepaidInsurance)

•OnJanuary10,GlendaleMarketpurchasedtwolotsoflandequalsizeforatotalof$10,000.It

therebyacquiredanasset,Land.Itpaid$2,000incashandgaveaten-yearmortgageforthe

balanceof$8,000.(MortgagePayable)

•OnJanuary11,GlendaleMarketsoldoneofthetwolotsoflandfor$5,000.Thebuyerpaid

$1,000cashandassumed$4,000ofthemortgage;thatis,GlendaleMarketwasnolonger

responsibleforthishalfofthemortgagepayable.

•OnJanuary12,Smithreceivedanofferof$15,000forhisequityinGlendaleMarket.Although

hisequitywasthenonly$10,700,herejectedtheoffer.Thismeansthatthestorehadalready

acquiredgoodwillwithamarketvalueof.

•OnJanuary13,Smithwithdrawforhispersonaluse$200cashfromtheGlendaleMarketbank

account,andhealsowithdrawmerchandisecosting$400.

•OnJanuary14,SmithlearnedthatthepersonwhopurchasedthelandonJanuary11for$5,000,

solditfor$8,000.ThelotstillownedbyGlendaleMarketwasidenticalinvaluewiththisother

plot.

•OnJanuary15,GlendaleMarketpaidoff$2,000ofitsbankloan,givingcash.

•OnJanuary16,GlendaleMarketwaschangedtoacorporation.JohnSmithreceived100shares

ofcommonstockinexchangeforhis$10,100equityinthebusiness.Heimmediatelysold25of

thesesharesfor$4,000cash.

3.1ncomeMeasurement

•Therearetworeasonsfortheincreaseofanentity?sequity.Oneisthereceiptofcapitalfromits

equityinvestors,thatis.

•Theotheronesourceofanincreaseistheprofitableoperationoftheentity,thatis.

Whataffectsandwhatdoesn'taffectRetainedEarnings?

/Borrowing$5,000fromabank

/Thepurchaseofinventorycosting$2,000

/Sellingmerchandisefor$300whichcost$200

/Thepurchaseofmerchandisefor$2,000

«Sellingmerchandisefor$800whichcost$500

JSellingmerchandisefor$900whichcost$600

•Theamountbywhichequityincreaseasaresultofoperationduringaperiodoftimeiscalledthe

incomeofthatperiod.

•AnaccountingreportcalledtheIncomeStatementexplainstheincomeofaperiod.

•TheIncomeStatementisfora[periodoftime/pointintime],incontrastwiththeBalanceSheet,

whichisfora[periodoftime/pointintime].

•TheincreaseinRetainedEarningsresultingfromoperationsiscalledarevenue.

•TheassociateddecreaseinRetainedEarningsiscalledanexpense.

•Example:

•WhenGlendaleMarketsoldmerchandisefor$300thatcost$200,theeffectofthetransactionon

RetainedEarningscanbeseparatedintotwoparts:aof$andanof$.

•TheIncomeStatementreportsrevenuesandexpensesfortheperiodandthedifferencebetween

them,whichis.

•Income=Revenue-Expenses

•TheamountofRetainedEarningsonabalancesheetisthetotalamountretainedsincetheentity

beganoperations.

•Thetermsprofit,earnings,surplusandincomeallhavethesamemeaning.Theyarethe

differencesbetweentheofanaccountingperiodandtheofthatperiod.

•TheIncomeStatementreportsflowsduringaperiodoftime,whereastheBalanceSheetreports

statusasofapointoftime.

•ThustheIncomeStatementmaybecalleda[flow/status]report,andtheBalanceSheetmaybe

calleda[flow/status]report.

•Theincomestatementreportsrevenuesandexpensesfortheperiodandthedifferencebetween

them.

GlendaleMarket

IncomeStatement

fortheperiodJanuary2-8

Revenue................................................$2,000

Expense$1,300

Income...$700

Exercise:

OnJanuary2,JohnBrownstartedtheBrownCompany,InJanuary,BrownCompanydidthe

followingthings:

•Itreceived$5,000cashfromJohnBrownasitscapital.

•Itborrowed$10,000fromabank,givinganotetherefore.

•Itpurchased$4,000ofinventoryforcash.

,Itsold$2,000ofitsinventoryfor$6,000toacustomer,whopaid$3,500cashandagreedtopay

$2,500within30days.

•Itpurchasedanautofor$7,000.Itpaid$2,000downandgaveanotetotheauto-mobiledealer

fortheremaining$5,000.

•Brownwithdrew$1,000cashforhispersonaluse.

•Brownwasoffered$10,000forhisequityinthebusiness,butherefusedtheoffer.

•Question:

•PreparearoughdraftofabalancesheetforBrownCompanyasofthecloseofbusinessJanuary

31,andanincomestatementforJanuary.

Part3AccountingRecordsandSystems

教学方法：讲授法、实例法

教学目的：

♦掌握会计中借贷的含义

♦掌握会计分录、结账分录

♦熟悉分类账和日记账的使用

♦熟悉利润表中相关科目的特征

♦了解计算机在会计中的应用

重点和难点：

重点：

1.Rulesforincreasesanddecreases

2.1ncomeStatementAccounts

3.Theledgerandthejournal

4.Theclosingprocess

难点：

1.Rulesforincreasesanddecreases

2.Theclosingprocess

学时分配：6课时

讲课6课时

参考书目：

11、《基础会计》2006年7月第2版金跃武主编高等教育出版社

12、《企业会计准则》（财政部文件）2006年中国财政经济出版社

13、《基础会计与实务》2005年7月第2版李惠芝主编清华大学出版社

14、《基础会计》2005年7月第2版薛洪岩主编立信会计出版社

15、《初级会计实务》（全国会计专业技术资格考试用书）2004年9月第1版中

国财政经济出版社

LearningObjectives

•Thenatureoftheaccountandhowentriesaremadetoaccounts.

•Themeaningofdebitandcredit.

•Useoftheledgerandthejournal.

•Theclosingprocess.

•Itemsreportedontheincomestatement.

•Accountingwiththecomputer.

Theaccount

•Inpart2werecordedtheeffectofeachtransactionbychangingtheappropriateitemsona

balancesheet.Insteadofchangingbalancesheetamountsdirectly,accountsuseadevicecalledan

accounttorecordeachchange.

•Thesimplestformofanaccountlookslikealargeletter"T”,anditisthereforecalleda

T-account.ThetitleoftheaccountiswrittenontopoftheT.

Beginningbalance,the

Cashamountofcashatthe

beginningofthe

Beg.bal10,00accountingperiod.

TransactionsthataffecttheCashaccount

duringtheaccountingperiodcaneither

increaseordecreasecash.Thusonesideof

theT-accountisfor_______andtheother

sideisfor_______.

•Increasesincashaddtothebeginningbalanceandthebeginningbalanceisrecordedontheleft

sideoftheT-account.

•Therefore,increasesincasharerecordedonthesideoftheT-account;decreasesare

recordedontheside.

•RecordtheeffectofthefollowingtransactionsonT-accountforCash:

•A.Theentityreceive$300cashfromacustomer.

•B.Theentityborrowed$5,000fromabank.

,C.Theentitypaid$2,000cashtoasupplier.

•D.Theentitysoldmerchandisefor$800cash.

Cash

(Increases)(Decreases)

Beg.baL10,0002000

300

5,000

800

•Attheendofanaccountingperiod,theincreasesareaddedtothebeginningbalance,andthetotal

ofthedecreasesissubtractedfromit.Theresultisthenewbalance.

(Increases)(Decreases)

Beg.baL10,0002,000

300

5,000

800

TotalTotal

NewbalancethebeginningbalanceofCashinthe

nextaccountingperiod

Rulesforincreasesanddecrease

•inthe『accountforCash,increasesarerecordedontheside.Thisistheruleforallasset

accounts;thatis,increasesinassetaccountsarerecordedontheside.

•Example:BrownCompanyreceived$300cashfromJonestosettleheraccountreceivable.

Cash

(Increases)(Decreases)(Increases)(Decreases)

Beg.baL10,000Beg.baL2,000

300

Accordingtothefundamentalequation,accountingrequiresthat

eachtransactiongiverisetoequaltotalsofleft-sideand

right-sideamounts.

•Anincreaseinanyassetaccountisalwaysrecordedontheleftside.Therefore,sincethetotalsof

left-sideandright-sideamountsmustequaleachother,adecreaseinanyassetmustalwaysbe

recordedontherightside.

•BlackCompanyborrowed$700fromFederalBank,signinganote.

Cash

(Increases)(decreases)

Beg.baL10,000

300

Toshowequaltotalsofright-sideandleft-sideamounts,thecorresponding

changeisrecordedontherightside.

•AstheequationAssets=Liabilities+Equityindicates,therulesforliabilitiesaccountsare:

•Liabilitiesaccountsincreasesontherightside.

•Liabilitiesaccountsdecreasesontheleftside.

•Therulesforequityaccountsarethesameasthoseforliabilitiesaccounts.

•Assetsaccountsareontheleftsideofthebalancesheet,andtheyincreaseontheleftside.

•Liabilityandequityaccountsareontherightsideofthebalancesheet,andtheyincreaseon

therightside.

DebitandCredit

•Inthelanguageofaccounting,theleftsideofanaccountiscalledthedebitside,andtheright

sideiscalledthecreditside.

•DebitandCreditarealsoverbs.Torecordanincreaseincash,wedebittheCashaccount.To

recordadecreaseincash,wecredittheCashaccount.

•Increasesinassetsare[debits/credits].

•Decreaseinliabilitiesare[debits/credits].

•Increasesinequityare[debits/credits].

•Decreasesinequityare[debits/credits].

•Exhibit3

•Recordthefollowingtransactionsintheaccounts.

•A.Inventorycosting$600waspurchasedforcash.

•B.Inventorycosting$400waspurchasedoncredit.

•C.GreenCompanypaid$300toacreditor.

•D.GreenCompanyreceived$500incashfromacreditcustomer.

•Becausethetotalofthedebitentriesforanytransactionshouldalwaysequalthetotalofthe

creditentries,itiseasytochecktheaccuracywithwhichbookkeepingisdone.

IncomeStatementAccounts

•IncomeStatementreportstherevenuesandtheexpensesofanaccountingperiodandthe

differencebetweenthem,whichis.

•(Therearevarioussubtotalsofincomes,suchasGrossIncomeandOperatingIncomeandNet

Income.)

•Revenuesare[increases/decreases]inequityduringaperiod,andexpensesare

[increases/decreases]inequity.

•increasesinrevenuesare[debits/credits].

•increasesinexpensesare[debit/credit].

Theledgerandthejournal

•Solongasthereisspacetorecordthedebitsandcreditstoeachaccount,itisaledger,suchas

thoseforGreenCompanyinExhibit3.

•Inpractice,transactionsarefirstwritteninarecordcalledajournal.

•Therecordmadeforeachtransactioniscalledajournalentry.

2CashV10,000

Paid-inCapitalV10,000

3CashV5,000

NotePayableV5,000

4InventoryV2,000

V2,000

5CashV300

RevenuesV300

6InventoryV2,000

AccountsPayableV2,000

•Aswesee,foreachjournalentry,theaccounttobedebitedislistedfirstandtheaccounttobe

creditedislistedbelow,andisindented.

•Dr:.........................................

•Cr:............................................

Ifyouareuncertainastowheth