課程教案

2014—2015學年第三學期

課程名稱：會計英語

課程性質：必修課

授課班級：涉外會計

授課教師：楊蜜

教師所屬系（部）：商貿系

總學時：40

周學時：2

PartiBasicofaccounting

教學方法：講授法、實例法

教學目的：

?掌握資產、負債和所有者權益的會計含義

?掌握復式記賬、貨幣計量、會計實體、持續經營以及資產計量原則

?熟悉資產負債表的特征

?了解資產負債表的主要科目

重點和難點：

重點：

l.Fourbasicfinancialstatements

2.Sixelementsofaccounting

3.Conceptsthatgovernallaccounting

難點：

1.Conceptsthatgovernallaccounting

學時分配：4課時

講課4課時

參考書目：

1、《基礎會計》2006年7月第2版金躍武主編高等教育出版社

2、《企業會計準則》（財政部文件）2006年中國財政經濟出版社

3、《基礎會計與實務》2005年7月第2版李惠芝主編清華大學出版社

4、《基礎會計》2005年7月第2版薛洪巖主編立信會計出版社

5、《初級會計實務》（全國會計專業技術資格考試用書）2004年9月第1版中

國財政經濟出版社

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(會計核算的基本概念)

(1)Thedual-aspectconcept

復式記帳概念

Thefundamentalaccountingequation:

Assets=Liabilities+Equity

復式記帳特點

/在兩個或兩個以上相互聯系的賬戶中記錄一項經濟業務，以反映資金運動的來龍去脈。

/以相等的金額記入相應的賬戶，以便于檢查賬簿記錄的正確性。

(2)Themoney-measurementconcept貨幣計量

Accountingreportsonlyfactsthatcanbeexpressedinmonetaryamounts.

(3)Theentityconcept會計實體

Abusinessisanentity;acollege,agovernment,achurcharealsoentities.

(4)Thegoing-concernconcept持續經營

Accountingassumethatanentitywillcontinuetooperateindefinitelyunlessthereis

evidencetothecontrary.

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

soldforiftheentityceasetoexist.

4.Conceptsthatgovernallaccounting

■(5)Theasset-measurementconcept資產計量

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

教學方法：講授法、實例法

教學目的：

?掌握資產負債表中主要科目的含義

?熟悉、掌握交易對資產負債表的影響

?熟悉收入、費用和利潤的概念

?了解利潤表的特征

重點和難點：

重點：

1.Themeaningoftheprincipalitemsreportedonabalancesheet;

2.Howseveraltypesoftransactionschangetheamountsreportedonthe

balancesheet;

3.Thenatureofincome.

難點：

1、Howseveraltypesoftransactionschangetheamountsreportedonthebalancesheet

學時分配：6課時

講課6課時

參考書目：

6、《基礎會計》2006年7月第2版金躍武主編高等教育出版社

7、《企業會計準則》（財政部文件）2006年中國財政經濟出版社

8、《基礎會計與實務》2005年7月第2版李惠芝主編清華大學出版社

9、《基礎會計》2005年7月第2版薛洪巖主編立信會計出版社

10、《初級會計實務》（全國會計專業技術資格考試用書）2004年9月第1版中

國財政經濟出版社

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.

?In"NoncurrentAssets”,wecanfind"Investment”.TheInvestmentsitemconsistsofsecurities,

suchasbonds.EvidentlyGarsdenCompanydoesnotintendtoturntheseinvestmentsintocash

within_______(howlong?).

?Ifthesesecuritieswereexpectedtobeturnedintocashwithinthatperiod,theywouldbelistedas

acurrentasset,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:

?Ltheamountislarge;

92.theexactamountowedmaynotbeknownasofthedateofthebalancesheet.

?Itisacurrentliabilitybecausetheamountisduewithin________.

?TherearetwoitemsifLong-termDebtshownasliabilitiesinthebalancesheet.Oneislabeled

“currentportion”,becauseitisduewithin.

?Theotherislisted"noncurrentportion”.Thispartdoesn'tbecomedueuntilafter.

?XAlthoughasingleliabilitymayhavebothacurrentportionandanoncurrentportion,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

/Sellingmerchandisefor$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

教學方法：講授法、實例法

教學目的：

?掌握會計中借貸的含義

?掌握會計分錄、結賬分錄

?熟悉分類賬和日記賬的使用

?熟悉利潤表中相關科目的特征

?了解計算機在會計中的應用

重點和難點：

重點：

1.Rulesforincreasesanddecreases

2.1ncomeStatementAccounts

3.Theledgerandthejournal

4.Theclosingprocess

難點：

1.Rulesforincreasesanddecreases

2.Theclosingprocess

學時分配：6課時

講課6課時

參考書目：

11、《基礎會計》2006年7月第2版金躍武主編高等教育出版社

12、《企業會計準則》（財政部文件）2006年中國財政經濟出版社

13、《基礎會計與實務》2005年7月第2版李惠芝主編清華大學出版社

14、《基礎會計》2005年7月第2版薛洪巖主編立信會計出版社

15、《初級會計實務》（全國會計專業技術資格考試用書）2004年9月第1版中

國財政經濟出版社

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

?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:............................................

Ifyouareuncertainastowhetheraparticularaccountistobedebitedorcredited,you

usuallycanHndoutby