Students will define generally accepted accounting principles and basic business structures.
Define accounting and generally accepted accounting principles (GAAP).
Accounting -- Changes That Affect Owner's Equity
Introduction of transactions that affect the owner's equity of a proprietorship. Introduction of revenue from sales, how sales affects owner's equity. Introduction of the different expenses for a proprietorship, how paying for expenses affects owner's equity. Introduction of the owner's drawing account for a proprietorship, why an owner might use the drawing account and how withdrawing money for personal use of the owner affects owner's equity.
Accounting -- Journalizing Purchases and Cash Payments
Introduction of an expanded 11 column journal for a partnership set up as a merchandising business. Introduction of what a partnership is consisted of and the advantages and disadvantages of a partnership. Introduction of what a merchandising business is, the cost of merchandise, mark up, vendors, invoices, and terms of sale. Introduction of the need for an 11 column journal and how to journalize purchasing merchandise for cash, purchasing merchandise on account and reviewing buying supplies for cash, buying supplies on account, paying cash for expenses, and paying cash to the different partners for their personal use.
Accounting -- Journalizing Sales and Cash Payments
Introduction of what a customer is, how to journalize a sales to a customer who pays for the purchase with a credit, a customer who buys their purchase on account, and a customer who pays the store back for the purchase they made on account. In addition, how to prove cash at the end of the month.
Accounting -- Posting to General and Subsidiary Ledgers
Introduce general ledgers, and the need for subsidiary ledgers for a partnership set up as a merchandising business. Introduction of the need for subsidiary ledgers for accounts payable and accounts receivable accounts. Discussion of controlling accounts, the balance of a controlling account and its relationship to the individual subsidiary ledger. Review of posting the journal's general column entries to their general ledgers, posting the journal 's special column totals for sales, sales tax, purchases debit, and cash to their general ledgers. In addition to posting journal entries totals of A/P and A/R columns, the individual entries related to the A/P and A/R accounts that need to be posted individually to their individual subsidiary ledgers. Introduction of how to prove the accuracy of the subsidiary A/R ledgers by preparing a schedule of A/R and proving the accuracy of the subsidiary A/P ledgers by preparing a schedule of A/P. Then as a final step how to prepare a trial balance to prove that debits equal credits.
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