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List of current liabilities that can be found on a Balance Sheet. They all have a normal credit balance.

Accounts Payable
Deferred Income Tax Payable
Employees Federal Income Tax Payable
Federal Income Tax Payable
Federal Unemployment Tax Payable
Income Tax Payable
Medicare Tax Payable
Salaries Payable
Sales Tax Payable
Social Security Tax Payable
State Unemployment Tax Payable
Unearned Rent
Vacation Pay Payable

Popularity: 1% [?]

This is a list of current assets that you normally use. They have a normal debit balance except the Allowance for Doubtful Accounts, which has a credit balance. These accounts are found on the balance sheet.

Accounts Receivable
Allowance for Doubtful Accounts
Cash
Finished Goods
Interest Receivable
Marketable Securities
Materials
Merchandise Inventory
Notes Receivable
Petty Cash
Prepaid Insurance
Supplies
Work in Progress

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Here is a list of income accounts. They have a normal credit balance except the Sales Discounts and the Sales Returns and Allowances, which have a normal debit balance. These items can be found on the Income Statement.

Dividend Revenue
Exchange Gain
Gain on Disposal of Fixed Asset
Gain on Redemption of Bonds
Gain on Sale of Investments
Interest Revenue
Rent Revenue
Sales
Sales Discounts
Sales Returns and Allowances

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The very essence of accounting can be broken down to what is called the Accounting Equation. This equation has 3 major parts. They are:

Assets – which are things of value , such as cash, equipment, supplies, buildings, and land.

Liabilities – which are the debts that you owe.

Equity – is what is left after you subtract liabilities from assets.

So the equation is:

Assets = Liabilities + Equity

If you know any of the 2 parts of the equation, you can solve for the third part. Here is an example:

Assets (?) = Liabilities (3,500) + Equity (10,000)

? = 3,500 + 10,000

13,500 = Assets

Pretty simple stuff, but one thing that is not stressed enough in beginning accounting courses. If you know this equation you then should be able to figure out most of your entries. Why? Because everything has to equal.

Here are a couple of variations on the equation that you can work on.

Assets (10,000) – Liabilities (5000) = Equity (?)

Assets (15,000) = Liabilities (?) + Equity (5000)

Assets (12,500) = Liabilities (3500) + Equity (?)

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Whenever you dispose of equipment you have to make an entry in your General Ledger. In most cases you experience a loss so that is one account that will be used. You will also use the Equipment account and the Accumulated Depreciation account. For this example, the equipment cost 10,000 and the accumulated depreciation is 8500. The entry to write of this piece of equipment is:

Loss on Disposal of Equipment 1,500 debit
Accumulated Depreciation 8,500 debit
Equipment 10,000 credit

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The production method is based solely on the use of the machine instead of how long you have it. Calculating depreciation is very similar to the straight line method. You need to know the cost, the residual value, and the estimated units of useful life. The formula is:

(Cost – Residual Value)/Estimated Units of Useful Life

For example, The cost of the machine is $10,000 and the Residual Value is $1000. You can produce 100,000 units with it. To calculate the depreciation for 1 unit, you need to do the following:

(10,000 – 1,000) = 9000 to depreciate

9000 / 100,000 = .09 per unit

First year you make 5000 units. The depreciation for the first year is:

5000 x .09 = 450

Popularity: 1% [?]

A list of typical expenses found in accounting work. Expenses have a normal debit balance and get debited when they increase. Credit them to decrease the expense.

Advertising Expense
Amortization Expense
Depletion Expense
Income Tax Expense
Insurance Expense
Interest Expense
Loss on Disposal of Fixed Assets
Loss on Redemption of Bonds
Loss on Sale of Investments
Payroll Tax Expense
Pension Expense
Rent Expense
Salaries Expense
Supplies Expense
Transportation Out
Uncollectible Accounts Expense
Utilities Expense
Vacation Pay Expense

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