3469154
Description
Mind Map by leahrcddavis, updated more than 1 year ago
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Created by leahrcddavis
over 8 years ago
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What is an account
- What is the purpose of an account?
- An account refers to the assets, liabilities,
income, expenses and equity represented
by individual ledger pages.
- What is a ledger? A book or other collection of financial accounts.
- What is a ledger? A book or other collection of financial accounts.
- Values are chronologically recorded with debt
and credit entries, these entries referred to as
postings become part of a book or final ledger.
- An account refers to the assets, liabilities,
income, expenses and equity represented
by individual ledger pages.
- 5 different categories of accounts.
- Asset - An asset is the money owed to a
company and track funds that are received
and not yet deposited into the account.
- Liabilities - liabilities
are accounts payable:
money that the
company owes to other
companies for example
bank loans.
- Equity- Equity is money you put into the
business to pay for assets, also known as
Capital.
- Revenue - Revenues are sales events
outside the company, interest,
income, money that goes into the
business as a result of good services
sold.
- Expenses -
money that
goes out of the
business that
pays for
operations.
paying back
loans, asserts
and dividends
are not
expenses but
costs of goods
ARE expenses.
- What is a dividends? a
sum of money paid
regularly by a
company to a share
holders, paid out of
profits or reserve.
- What is a dividends? a
sum of money paid
regularly by a
company to a share
holders, paid out of
profits or reserve.
- Asset - An asset is the money owed to a
company and track funds that are received
and not yet deposited into the account.
- What is the difference between capital and revenue?
- Capital - Capital requires a debit to the fixed asset accounts and credit to the accounts payable. Capital deals
with long term things such as land, and machines. capital is also used in business when the business spends
money to buy assets or add value to the existing.
- Revenue - Revenue accounts are day to day
expenses in a firm/ short term, day to day/
weekly/ monthly.
- Capital - raises the earning capacity of the
business.
- Revenue - maintains the
earning capacity of the
business.
- Capital - Capital requires a debit to the fixed asset accounts and credit to the accounts payable. Capital deals
with long term things such as land, and machines. capital is also used in business when the business spends
money to buy assets or add value to the existing.
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