Future Profit - WHS Accounting

The Westwood Schools Introduction to Accounting Course taught by Mrs. Davis.

This is where we will post our daily topics of discussion and invite business leaders to contribute and share with the class as we learn about accounting.

Wednesday, October 11, 2006

PETTY CASH

An amount of cash kept on hand and used for making small payments is called petty cash.
buisnesses usually have some small payments that are not check worthy or cost efficient so they use petty cash. They usually have a different cash fund for it.

Chapter 6 vocab

checking account
endorsement
blank endorsement
special endorsement
restrictive
bank statement
dishonored check
eft
debitcard
petty cash
petty cash slip

Scribe Post on 5-3

Accounting 5-3

Vocabulary words you will need to know:

Proving Cash: determining that the amount of cash agrees with the balance of the cash account in the accounting records.

Correcting Entry: a journal entry made to correct an error in the ledger.

*when an error in a journal entry has been posted, the incorrect journal entry should be corrected with an additional journal entry.


Tuesday, September 05, 2006

Owner withdrawals

Employee salaries are soncsidered an expense that reduces the net income of a company. IF the owner widthdraws cash from the company its not considered an expense. A business owned by one person is called proprietorship. becuase the net income of a proprietorship is not affected by owner withdrawals the income tax paid by the owner is not affected by how much cash the owner withdrawsfrom the business.

Friday, September 01, 2006

Accounting Set Up

Remember that everyone should be online and participating in our blog. We will spend more time working in our blog in the coming weeks! If blogging is new to you remember that we were all beginners at some point and stick with it. It will start to make sense!

Friday, August 18, 2006

Thursday Scribe: Lauryn

8/17/06
Scribe: Lauryn


Assets = Liabilities + Owners Equity

An example of a balance sheet is on Pg. 14

Steps:
1) Write the heading, centered, at the top of the page on the first, second, and third lines. This consists of the business name, ‘Balance Sheet,’ and the date.

2) Prepare the assets section. Write ‘assets’, centered, on the first line in the left column. Write ‘cash’, ‘supplies’, and ‘prepaid insurance’ under that in the same column, not centered. Write the balance on the same column but on the right.

3) Prepare the liabilities section. Write ‘liabilities’ on the right column on the first line, centered. Write the accounts payable under that and not centered. Write the balance for that on the right.

4) Prepare the owner’s equity section. Write ‘owner’s equity’, centered, on the line right underneath the accounts payable. Write the capital under that but not centered. Write the balance for the capital on the right.

5) Add amounts and compare totals. Write ‘total assets’ under ‘prepaid insurance’ and write ‘total liability and owner’s equity’ under the capital.

6) Draw a single line under all of the balances for assets and the balances for liabilities and owner’s equity. This means that the amounts are added or subtracted.

7) Then, add up all of the assets and all of the liabilities and owner’s equity. If both of these totals are the same then write them out beside ‘total assets’ and ‘total liabilities and owner’s equity.’

8) Draw a double line under both of the totals (which must both be the same).

Tuesday, August 15, 2006

Chapter 1 section 2 notes

Chapter 1 Section 2 (pages 6 (starts on page 9) -12)

Ø Concepts
o Concept of Business Entity
§ Is applied when a business’s financial information is recorded and separated from owner’s personal financial information.
§ The business can be owned by one person or a company.
§ You can not pay out personal expenses from the business even if it is privately owned by one person or not.

o Concept of Unit of Measurement
§ Measured in dollars or some type of value.
§ It can not be in different currencies

Ø Transaction #1 Page 9
o Receive cash from owner as an investment
o You must add the amount received to the liabilities and the owner’s equity so that both sides equal out to the same amount
o Remember the rule of thumb in math. If you do one thing to one side then you must do it to the other.

Ø Transaction #2 Page 10
o You have a plus and a negative and when you have both they add out to zero
o Your capital is never changed and you pull everything down


Ø Transaction #3 Page 10
o You take money out of cash and put it into the prepaid (asset) amount and again it is a plus and minus so it equals out to a zero.
o Your capital again does not change because you don’t touch it or need anything out of it.


Ø Transaction #4 Page 11
o When taking money out from a liability account (Buying with no money (loaning)) it goes over to your assets as the same amount (even though you borrowed the money it is not a minus on your liabilities).
o After all your transactions you will minus the amount of money that you owe to the liabilities.

Ø Transaction #5 Page 11
o Paying back liability out of cash (asset)
o Subtract from your asset (cash) and then transferred to pay off your liability.
o In doing all of that it keeps both sides equal.

Ø Accounts Payable: is a liability account which means that it has to be paid

Ø Anything prepaid is a asset

Ø Capital Account: is a owners equity

Ø A/P: the abbreviation for accounts payable

Ø Both sides of the accounting equation must always equal

Monday, August 14, 2006

Welcome to Accounting

Welcome to the Introduction to Accounting elective for Westwood Schools Juniors and Seniors taught by Mrs. Davis.

Here we post our daily notes and allow people to interact with us from the business community.

Remember, students, you must accept your invitation to collaborate on our website and that all classroom rules apply in our online classroom!

Scribe Post for August 14, 2006

Terms to know:

Sole Proprietorship: a business owned by a single person. Your business and personal books must be kept separate.

An asset is something you own.
The total amount a business owes is liability.
Assetsliability= owner’s equity

Examples:
Asset: vehicles
*most common: checking account

Liability: credit card debt

Owners Equity: what is left over for you.
______________________________________________________________________________

Accounting Equation:

Assets = Liabilities + Owner’s Equity

Assets - Liabilities = owner’s equity