ACCT 729 Key Formulas Cheat Sheet

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Key Formulas
SEE Articulation- Pg. 16

Income= Revenues - Expenses
Assets = Liabilities + Equity
Gross Profit = Sales Revenue- COGS

Pg. 12
Assets (Listed in order of solvency)
Cash………………………………………………………………..$1,955 Non-Cash………………………………………………………..13,043 Total Assets….....................................................$14998

Current yr net income
% Return on = Net Income =
[(Prev. yr S/E + Current yr. S/)/2]
Equity (ROE) Average S/E
Pg. 21

Beginning retained Earnings + Net Income (- Net Loss)Dividends = Ending Retained Earnings

Liabilities:
210 Accounts Payable
220 Interest Payable
230 Wages Payable
240 Taxes Payable
250 Unearned Revenue
260 Notes Payable

$3,444

$6905

$215

$9,754

522
2,133

2,133

(569)

(569)

Other Changes

(19)

(1,858)

(120)

(1,997)

$3,947

Balance, End of
Period

$5,801

$95

$9,843

Chapter 1
Liability Accounts

=
DR
Normal

Analyze, Journalize, Post Pg. 62

CR

-

+
CR
Normal

DR

DR
Normal

CR

**General Ledger Pg. 68: T-Accounts as Assets, Liabilities, Equity** Pg. 60/61

Cash Asset + Non Cash Asset = Liabilities + Contributed Capital + Earned Capital

+ DR.

- CR.

Cash

Beg. Bal. 0
(1)
20,000 (3)
(2)
5,000
End Bal. 23,000

Revenues – Expenses = Net Income

Accounting Relation

Debit

Credit

A

Increase

Decrease

L

Decrease

Increase

S/E

Decrease

Increase

Income Statement

R

Decrease

Increase

Expense

E

Increase

Decrease

Balance Sheet

2,000

Pg. 60

DR…. To the Left
CR…. To the Right

Pg. 62

Current Ratio (#) = Current Assets
Current Liabilities
Pg. 69
More stringent test of liquidity

Net Working Capital ($)= Current Assets – Current Liabilities Pg. 69

Expense Accts

Equity Accounts

CR
Normal

DR

FSET Template-Balance Sheet
Transaction

522

Net Income
Dividends

Measures Solvency (Ability to avoid
bankruptcy) >1 is more risky Pg. 23

Expenses:
510 COGS
520 Wages Expense
530 Rent Expense
540 Advertising Expense
550 Depreciation ExpenseFixtures and Equipment
560 Insurance Expense
570 Interest Expense

Chart of Accts Ex. Pg. 49

Total
S/E

Asset Accounts

Debt to Equity Total Liabilities
=
Total S/E
Ratio (D/E)

Revenues and Income:
410 Sales Revenue
420 Interest Revenue

Equity:
310 Common Stock
320 Retained Earnings

Other
S/E

Stock Issuance

Operating Cash Flows……………….…$1,812
Investing Cash Flows……….…………..(1,021)
Financing Cash Flows……….………….(1,972)
Effect on exchange rate changes….. 57
Net Increase (Decrease) In Cash… (1,124)
Cash, Beginning of Period……………3,079
Cash, End of Period……………………..$1,955

Equity
Contributed capital……………………....................$3,947 Retained Earnings………………………………………….5801 Other stockholder’s equity………………………..........95 Total Equity………………………………......................9,843 Total liabilities and stockholders’ equity……$14,998

Retained
Earnings

Balance, Beg. of
Period

Statement of Cash Flows Pg. 14

Liabilities and Equity
Total Liabilities……………………………....................$5,155

Assets:
110 Cash
120 Accounts Receivable
130 Other Receivables
140 Inventory
150 Prepaid Insurance
160 Security Deposit
170 Fixtures and Equipment
175 Accumulated
Deprecation- Fixtures and
Equipment

Contributed
Capital

(w/ Gross Profit) Pg. 13
Revenues…………………………$20,862
- COGS……………………………..11,354
= Gross Profit……………………9,508
- Other Expenses.……………..7,375
Net Income (or Loss).........$2,133

Balance Sheet Layout

Measures Profitability

Statement of Stockholders’ Equity Pg. 14

Income Statement

Quick= Cash + Short Term Securities + Accounts Receivable
Ratio
Current Liabilities
(#)

Chapter 2
Effect if not adjusted

Adjustment

Examples

Adjusting Entry

Balance Sheet

Deferrals

Unearned
Revenues

Delivery on advance from Clients, gift cards, and
subscribers

Dr. Liability
Cr....
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