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.

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).

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