Alright here we are we're going to jump right into in because today is a very important
lecture. So let's go right into it I know one the problems that I gave you was to finish
up the valentine hand out correct? Ok so let's go ahead and take a look at that the answer
to the income statement I believe we went over that in class, but let's take another
look at that. The answer to the income statement I believe we went over that in class but let's
take another look at it the answer to the valentine income statement is shown up there
we have our revenue our less our expenses and we have dated it properly or prepared
it in good form or prepared it in proper form. We have the name of the company, the name
of the statement and its dated correctly it says for the month ended eight thirty one
thirteen on the income statement correct? And that gives us in this case a net income
of seven thousand and forty and that flows down to the statement of equity right? Statement
of equity there's the net income right there. We have our beginning balance of capital which
is twenty eight thousand we add our net income though there were not any investments by the
owner in this period that's fine that's not always going to be the case. And then we deduct
the withdrawals that valentine made correct? Which is thirty five hundred that gives us
an ending balance of capital thirty one five forty once again it's prepared in proper form
the name of the company, the name of the statement and its dated properly for the month ended
eight thirty one thirteen the way this is dated will always be the same as the income
statement. Ok any question on the income statement or the statement of equity. Ok the ending
balance of capital is thirty one five forty and that flows over to our final statement
that were going to prepare which is the balance sheet correct? The balance sheet is dated
a little differently we don't say for the month ended we say just either at or as of
or just the date eight thirty twenty thirteen, because this is a snapshot right? We have
our assets our liabilities our equity total assets are thirty four oh twenty make sure
you label that we have our total liabilities and equity that also equal thirty four oh
twenty we want those number to be equal and we want to label that as well, and there's
that thirty one five forty that came over from the statement of equity. Kara? So accounts
receivable is an asset and accounts payable is always a liability. That's correct accounts
receivable is always an asset we're going to receive cash in the future and accounts
payable is a liability were going to have to pay in the future it debt ok. And where
did notice going back to the statement where's unearned revenue unearned revenues a liability
and it shows up with the other liabilities on the balance sheet right? Common mistake
on the test is people put unearned revenue where? Where do they put it mistakenly? On
the income statements actually they see revenues and they put it with the other revenues ok.
So unearned revenue is not a revenue it's a liability unearned revenue is a liability
alright? Alright that was a test question on past test so I guarantee you see something
like that one thing I hope you did is at the very beginning as I said before I hope when
you got this you went through these and put what financial statement it was going to go
on like that ok and then did you check them off as you used them as you put them on a
statement you can check them off that way at the very end you can make sure all of the
numbers have been put somewhere ok. So if you don't do it that way a lot of times people
forget to put in account ok. One last while I guarantee that will be on the test, but
some students will just absolutely get OCD in regards to I can't get it to balance they
know their balance sheet is supposed to be balanced I can't get it to balance and I have
student be very unwise and spend literally thirty minutes on the financial statements
on the test trying to get it to balance and then the rest of the test just sits there
and there are not going over it you see what I'm saying? Don't obsess over it if it doesn't
balance come back to it do the rest of the test and there is partial credit but don't
get so obsessed I have seen students leave three pages blank on their test, cause they're
like I couldn't get my balance sheet to balance no you can move on and you should've moved
on. You see what I'm saying? I believe I assigned quick study one six right quick study one
six ok so let's do that. Identify which accounting principle or assumption best describes each
of the following practices. Ok if fifty one thousand cash is paid to buy land the land
is reported on the sheet to be at fifty one thousand what would that be? The cost principle
we record things at cost. Not what we think it's worth or if somebody appraised no it's
what we paid for it cost. B Alyssa keys owns both sailing passions and dockside supplies
when preparing transactions for dockside Keys make sure that the expense transactions of
sailing passions are kept separately from dockside transactions and financial statements
what's that? Business entity the business entity principle states that we keep things
separate from each other we keep two businesses separate from each other we keep the business
separate from our personal records ok good. C in December two thousand ten ace landscaping
received a customer's order and cash prepayment to install sod at a new house that will not
be ready until march of oh eleven ace should record the revenue in march two thousand and
eleven not December two thousand ten what's that? Revenue recognition principle we record
revenue when it is earned when is it earned? When we have provided the product or the service.
Is that correct cool. I think the last one I assigned was exercise one eighteen is that
correct? Let's talk real quick about this I wanted you to read about this each chapter
will have a statistic each chapter has a statistic or a ratio at the end that they want you to
become familiar with it. Anybody here play baseball anybody ever played baseball well
baseball has a lot of statistics and ratios that they figure out right? Batting average
ERA all those sort of things slugging percentage correct? Those are different ways of measuring
baseball players or team's right? And you can measure one player against another player
or you can measure one player this year as compared to last year, and these are just
different ways of analyzing well there's different ways of measuring companies and analyzing
on companies as well. One of those ways is the return on assets now the return on assets
is calculated by taking the net income divided by the average of total assets and in this
case they tell us in exercise one eighteen that Geneva group reports net income of twenty
thousand for oh eleven at the beginning of two thousand and a eleven they had a hundred
thousand in assets by the end of two thousand and eleven assets had grown to one fifty what
is Geneva group's two thousand elevens return on assets how would you assess its performance
if competitors average a ten percent return on assets? Well we take that net income of
twenty thousand divided by the average total assets which in this case one hundred and
twenty five thousand twenty divided by one twenty five is sixteen percent right? Now
these ratios don't mean anything in themselves we have to compare it to something it's like
if you ever go to the doctor, and they give you a score like a cholesterol score your
cholesterol score is seventy four ok is that good or is that bad? We don't know the number
in itself we don't know ok. So in this case what do we compare this to well they tell
us that competitors average a ten percent return on assets so I would say looking at
this ratio alone its above it and thus as far as that ratio by itself it's pretty good
thing isn't it? Now we have to look at other ratios right just like when you go to the
doctor you can't just go get one thing one part of yourself analyzed and ignore everything
else right? But and you also have to make sure like in this case we prepared this ROA
to its competitor that's a good comparison right? But you wouldn't compare the return
on assets of a steel manufacturing firm with the return on assets with the law consulting
firm that's apples to oranges so you want to make sure it's an industry comparison,
or a competitor comparison or you're comparing it to that same firm at a different period
in time. You with me? I don't hammer on the ratios I usually have one multiple choice
question on the test about it. It's not that it's not important it's extremely important
and as a matter of fact I just helped lead this seminar where were trying to train people
in the banking industry how to best use ratio analysis assessing if they should companies
loans. Financial statement analysis and ratio analysis is an extremely useful skill and
so but were just going in this class just kind of introduce these things you'll see
these terms in other classes that you take. I think that's it for the homework alright
this is an important lecture and I'm glad you're here we are going to go to chapter
two which analyzing and recording transactions. I hope you all have your PowerPoint's and
for you at home you should print those off the angel website it's under the lessons tab
you should have the PowerPoint's for each chapter you should have those when you watch
the lecture it makes everything a lot easier. Alright chapter two analyzing and recording
transactions now let's just do a little review here we have lots of transaction that occur
in a business some are external transaction they occur between us and an outside party
and some are internal they occur within the organization. We know that an asset has to
equals liabilities plus owner's equity correct? I've hammered that in set in a different way
if we figure out the ending balances of all the assets accounts they have to equal the
sum of the ending balances of the liability and the equity accounts don't they? That always,
always, always has to stay equal assets have to equal liabilities plus the equity. We talked
about our assets and I believe the assets on your screen here I think we've talked about
all of them whoops that should be up there but you can figure that out. I believe we've
talked about all these except maybe prepaid accounts, prepaid accounts are like prepaid
rent let's say for my business I didn't just pay September's rent but I went ahead and
paid September, October, November, December. Well that's like I paid the rent early didn't
I? well that's an asset that's prepaid rent something else in your own life that is a
prepaid asset is your insurance your car insurance you have to pay for your insurance before
you actually use it as an asset as a matter of fact if you cancel your policy they send
you some money so that would be prepaid insurance. So any sort of prepaid item in business is
an asset ok. Our liabilities we talked about accounts payable notes payable we talked about
unearned revenue is a liability not a revenue but unearned revenue is a liability now what's
this thing called a accrued liabilities well that's kind of a title for a lot of different
types of accounts and well talk a little bit more about this in chapter three but this
is like your salaries payable, your wages payable, your interest payable, taxes payable
those sort of things so those are liabilities as well. And of course we talked about our
equity account we talked about what makes it increase what makes it decrease we talked
about how revenues and owners investments of assets into the company makes it increase
expenses and withdrawals by the owner out of the business makes it decrease. Once again
assets always have to equal liabilities plus owner's equity and then we expanded that accounting
equation didn't we? Recognizing that these things owner's withdrawals and expenses since
those actually make equity go down as owner's withdrawal and as expenses increase equity
actually decreases. You with me? Now let's go through his and this make not make a lot
of sense but were going to go through it again at the end of the chapter and it will make
more sense. What were going to do is were going to analyze transactions and events from
something called source documents what are source documents? Source documents are those
pieces of paper or like electronic emails, pdfs or whatever that are generated when you
do transactions, source documents are those things that are generated when you do transactions.
For example let's say that you go buy a computer at best buy ok well if you go buy a computer
at best buy they're going to give you an invoice right? That invoice is a source document let's
say you get paid well what are they going to give you? There are going to give you a
check and they're going to usually give you a pay check stub right? Ok let's say you go
pay a parking ticket well when you pay that parking ticket they're probably going to give
you a receipt right? To say you paid for that parking ticket correct, right? Let's say that
you get a bank statement you have a checking account and so you get a bank statement each
month that's a source document right? And that will show different things that you have
done throughout month. So all these pieces of paper that are generated and they're not
always paper anymore but a lot of them are electronic these are evidence that transaction
occurred and we can go back to them if needed. But source documents what we do is we analyze
the transactions events from these source documents then we're going to record these
transaction in what we call a journal alright. Then we are going to post the journal to the
ledger accounts and then we are going to learn about preparing and analyzing something called
a trial balance. Now again this doesn't all make sense right now there's a lot of terms
we didn't discussed but this is where were going with this chapter alright. Let's talk
about what an account is? An account is a record of increases and decreases in a specific
asset, liability, equity, revenue, or an expense item. For example going to the Elmo we kept
track of for instance cash and we would say cash increased by three thousand dollars right?
and then cash increased by five hundred dollars right then cash let's say it decreased by
three hundred and then it went up by let's say it went up by two fifty and then let's
say it went down by two hundred right? But that is an account and we're recording the
increases and decrease in that account correct? We did that in chapter one and of course we
could figure out the balance of that account what is the balance of that account? Three
two five oh I think you're right thirty two five oh yes. Ok that is an account going back
to this it's a record of increases and decreases in this case cash, but we could do that and
do that in every account now what it will and we'll come back to that in second, but
what is a general ledger? A general ledger is record containing all the accounts used
by a company if you look at exercise one eleven this is kind of an example at this point in
our learning of a general journal at least recording transactions in this way. But it
shows a lot of different accounts the increases and decreases and then it shows the ending
balance correct? Ok so that is kind of like a general ledger per say alright, now we're
going to learn a new way of recording business transaction were going to do a transformation
from the chapter one way to the new chapter two and beyond way. in a way chapter one is
kind of like the training wheels on a bicycle ok did anyone learn how to ride a bicycle
using training wheels? Well the training wheels kind of help you get the feeling on how a
bike should feel kind of lets you learn your balance how to turn but eventually what? Mom
or dad comes with a crescent wrench and they take the training wheels off right? now once
you learn how to ride a bike without the training wheels do you put the training wheels back
on no you never say I'm going to bike ride today just for old times' sake I think I'm
going to put those old training wheels back on no once you learned once you've taken them
off they're gone for good and that's the way you ride a bike from here on out so this is
what we're going to do the chapter one way was the training wheel method as far as recording
transaction. Chapter two I'm dad I got my crescent wrench we're taking the training
wheels off. Now I hope you understand the chapter one way if you don't what's going
to happen? you're going to fall down and scrape your knee aren't you? So you folks at home
if you don't understand chapter one and how to record transactions in those manner watch
those lectures again, but we're going to learn the chapter two way now. And this is the way
we'll do things. alright let's take a look back at that account that I wrote remember
that cash account that I wrote this is the chapter one way let me tweak this thing a
little bit lets ay you all understand this right? let's say I wrote it another way what
if I wrote it this way instead what if I decided to put the increase on the left side
and decreases on the right side ok. What would the balance the balance would still be thirty
two fifty right? You understand how that moved to this ok? So what if I would you allow me
to do that instead of writing it like this let me just put the increases for cash on
the left side and the decreases on the right side let me go ahead and draw a line down
the middle of that ok. So I put the increases of cash on
the left side and the decreases on the right side why don't we just go ahead and make one
little bit more change here and let me get rid of the pluses and the minuses ok. Let's
just say I know the increases are going to go over here and the decreases are going to
go over here this is cash and the balance is still thirty two fifty right? Do you understand
the transition from here to here? Ok for those of you have had accounting in high school
or college or whatever do you know that we have now prepared what do you know what this
is? It's a T account and the reason we call it a T account is because it looks like a
T and this going to be a vital part of the chapter two way that you'll learn and use
from here on out. Now this is a t account because again this looks like a t the left
side of a T account is called the debit side and the right side of a T account is called
the credit side, are you with me? The left side of a t account is called the debit side
and the right side is called the credit side. And we abbreviate debit with DR and don't
ask me why I know it doesn't have and R but the way we abbreviate debit is DR and the
way we abbreviate credit is with CR ok. You with me? Let's take a look at this one more
time. This is the chapter one way and then we kind of did this transition right here
right? And then I did this transition correct? And I introduce these new concepts called
the left side of the t account is the debit side and the right side is the credit side.
Now going back to our PowerPoint I have just introduced these new terms debit and credits
and I want to make some big cautions to you and please take head here the way your brain
works is whenever it learns a new term or you're trying to learn something you go out
in your brain you try to understand something that finds something that you already understand
and you kind of link it up this what your brain biologically works so if I introduce
a term to you and may be you understand the root term you'll try to figure it out or may
be even in sports right? When you're teaching somebody to swing the golf club easily you
might say just think of it like swinging a baseball bat just swing the bat just swing
the golf club it's going out in your brain finding something you do understand trying
to help you with this new concept that's understandably the way we work. But it could cause problems
in this specific area do not think of the way when we talk about these new terms debits
and credits do not think of the way that others use these terms such as your bank. And I know
your brains some of you when I said this is the debit side this is the credit side you
already started thinking about ok I know the bank says they're going to debit my account
and does that have something to do with this? no please don't go down that road no. For
our purposes I want you to think of the debit is the left side of the t account the credit
is the right side of the t account. You with me? Another mistake do not think of your plastic
debit cards and credit cards some of you did that. Now fifteen twenty years ago people
weren't even that familiar with the term debit but now we are all have debit cards don't
we? So now ok I think let me see if I can figure out this debit credit thing out the
Krug is talking about I have a debit card no don't do even go down that route don't
do it debit means the left side credit means the
right side. You with me? It would have made my life easier if thousands of years ago when
these terms originated if they wouldn't use the terms debit and credit I wish they would
have used the terms lefty and righty, or something like that. Ok but do not think of these things
in anyway except that debit means the left side and credit means the right side. Do not
mistakenly think as debit as debt and credit as credit like we're going to give you a line
of credit or something. Don't do that ok for accounting debit means left credit means right.
Do not mistakenly think debit as good things and credits as bad things this is another
problem some students have had. Once again debit means left credit means right, you with
me? Can I pan that any harder than I am, one more time debit means left credit means right.
Let's just say that as a class debit means left credit means right. That's what I want
you to concentrate on, are you with me? Now let's go back to this account that I showed
you if you look at this cash account you might understandably think ok debit means increase
and credit means decrease no debit does not mean increase and credit does not mean decrease.
Debit means the left side credit means the right side, you with me? Yes for cash specifically
for cash yes the increases are on the debit side and the decreases are on the credit side
but that is not always the case. Let me give you an example let's take a look at a different
account let's take a look at an account of notes payable which is a liability right?
Now this is a t account for notes payable. What's the left side called? On a t account
for notes payable the left side regardless of account the left side is the debit side
the right side is the credit side always, always, always regardless of the account the
left side is the debit the right side is the credit. Now I told you that for cash increases
are kept track of on the debit side and that is true, however for notes payable increases
are kept track of on the right side or the credit side. So let's say we were going to
increases notes payable let's say we are going to increase notes payable I would show that
on the credit side. Are you with me? For notes payable increases are on the credit side that's
why we can't say debit means increases and credit means decreases no, no, no. Debit means
left credit mean right some accounts the increases are kept track of on the debit side other
accounts increases are kept track on the credit side. Are you with me? One thing and then
I'll answer your question when I wrote that five hundred here that is called crediting
the account. Crediting the notes payable account when I wrote that five hundred on that credit
side for notes payable that is called I credited the notes payable account cause I wrote something
on the credit side, you with me? When I wrote this two fifty for cash that's called for
accounting purposes I debited cash for two fifty, because I wrote two fifty on the debit
side for cash. Kara did you have a question? Yeah when you write it you on this new way
you don't want us to put like a plus or minus" boy that is a great question that is a great
question that is exactly, exactly true Kara. Never ever do I want to see dollar signs or
plusses or minuses in a t account. Ok good question no plusses or minuses no dollars
signs in a t account. Alright now let me switch over here actually keep it off there keep
it on me for a second and let me go over the next thing I wanted to show you. Ok we've
been talking about two accounts here let's think of the way we recorded things in the
chapter one method and lets go to the Elmo now let's say we got a loan for five thousand
dollars from the bank let's say we got a loan of five thousand dollars from the bank. Well
the chapter one we would say cash plus five thousand and we would say notes payable plus
five thousand isn't that the way we would've done it? Now let's learn the new way of recording
this well let's do t accounts I'm going to do a t account for cash and I'm going to do
a t account for notes payable., and we know that the left side of the t accounts is the
debit side and the right side of the t accounts is the credit side. I also told you that increases
for cash are accounted for on the debit side so I'm going to debit cash for five thousand
dollars which means I increased cash for five thousand, because increases are on the debit
or the left side. Now I'm going to credit notes payable for five thousand and I'm increasing
notes payable because I told you that increase for notes payable are kept track of on the
credit side. This is the chapter one way this is the chapter two way , and that's how well
be doing things and as Kara said there's no dollar signs there's no plusses or minuses
are you with me? Question? For the notes payable is the five thousand go on the credit side
because its actually decreasing equity? No go back to it and I know where your brain
is going and I'll point that out in a second I told you that increase for cash are kept
track of on the debit side cash increased so I had to write it on the debit side. I've
told you that for notes payable increases are kept track of on the credit side and notes
payable did increase so I had to put that one the credit side where your brain is probably
going is saying ok you told us that cash increases are on the debit side and for notes payable
increases are on the credit side how do we know an account is which side do we do it?
But notes payable is increasing. Now that's goes to the PowerPoint
an account that is called a debit balanced account increases when you debit it and thus
decreases when you credit it. Cash is a normal debit balance accounts thus its increases
on the debit side and decreases on the credit side, you with me? But there are also accounts
called credit balance accounts such as notes payable for a credit balance accounts the
increases are on the credit side and decreases are on the debit side notes payable is a credit
balance account, you with me? Now all accounts are debited and credited at times sometimes
people think ok so a debit balance account could only be debited no all accounts are
both debited and credited we just have to know for that specific account if when its
debited if that means if its be increased or decreased, are you with me ok. Another
thing regardless of the account opposite side's line opposite affects so if this is an increases
this side is an decrease if this side is an increase then this is a decrease opposite
sides of the line opposite effects. But in this case they both increased the increase
for cash is on the debit side the increase for notes payable is on the credit side right?
Let's say this is a zero interest loan and we use three hundred dollars cash to pay off
some of this principle balance let's say there's no interest. Well we pay off three hundred
cash goes down by three hundred right? So we show a decrease on the credit side correct
for cash. Notes payable where do we keep track of decreases on the debit side you with me?
So all accounts are debited and credited we just have to know that cash is a debit balance
account thus debit increase it and credit decreases it. And notes payable is a credit
balance account thus credit increases it and debit decreases it. I know I'm throwing a
lot of information at you folks ok. Now the best question that could be coming into your
brain right about now is alright can I borrow this Jake? Which accounts are debit balance
accounts and which are credit balance accounts ok? It's not do you have chapter two let me
grab this where's chapter two? Ok may be I didn't bring that ok I think I gave that to
you in a separate one ok. The most logical question at this point is which account is
a debit balance account which account is a credit balance account ok. Now let me turn
in your book and I'll show you what I'm talking about. Alright turn to page sixty three
ok and you're going to see at the bottom at the bottom right on page sixty three a little
chart like this and this tells us that assets are normal credit balance accounts thus they
increase with the credit and they thus debits decrease them right? And you're going to see
liabilities like notes payable are debit balance accounts thus they increase with the debit
and they decrease with the credit. Ok now this is all good and fine but that's not the
way to learn this that is not the way to learn which accounts are debit balance accounts
and which accounts are credit balance accounts. Here's what I want you to do I want you to
prepare even in this age of technology and ipads and stuff what's the best way to learn
these flash cards. Flash cards I want you to learn this by flash cards now for example
here's one that I made for cash, and I'm not just going to do flash cards for assets I'm
going to do this for all sorts of assets I'm going to do it for cash I'm going to do it
for buildings I'm going to do it for notes receivable I'm going to do it for supplies
are those not all assets ok. Here's what I'm going to on one side of the flash card I have
the name of the account on the other side of the flash card I have cash is a debit balance
account thus a debit increases and a credit decreases, cash is a debit balance account
thus a debit increases and a credit decreases, you with me? Now I even went a little further
on this flash card as you can see on it and I said in the lower left corner I said that
is an asset and in the right side I said it is and it is on the balance sheet right? That
is a great flash card now mine looks all pretty but you can do yours on index cards or whatever
ok. On one side you put the name of the account on the other side you put that information.
Now you want to do this for all of your accounts for example let's just say that this is a
where's my pen? Lets' just say this is a blank flash card we learned notes payable today
right? so put notes payable on one side and on the other side is a credit balance account
therefor a credit increases and a debit decreases you with me? And you can say down here if
you want a liability and where do notes payable go? The balance sheet correct? But I want
you to think of all your different accounts that you used and I want you to learn your
account balances I cannot stress this enough you have to learn your account balances you
have to know which accounts are increased with the debit and thus are debit balance
accounts and which accounts are increased with the credit and thus are increased with
the credit you have to know this. If you don't learn this if you're stubborn and you say
Krug I don't want to learn this you should drop the class. I don't mean to be so dramatic
but you cannot do accounting unless you know this has anybody had accounting before in
high school or something? Ok let me ask you this is anybody here taking a math class?
At JCCC Jake you are you're taking statistics nobody else is taking a math class? You're
done, what you're taking statistics alright nobody here is taking college algebra you
are? What your name back there? "Brian I'm taking calculus" oh you're taking calculus?
Brian is taking calculus ok. Ok let me give this quiz I'm going to give this quiz to just
Brian, and I don't want you to be smart-aleck just look at the quiz and I want you to answer
this for me. One, two, three, four, blank, six, seven, eight, nine, ten ok I want you
to think about this don't be a smart-aleck, but Brian what number what is the answer that
goes in that blank? Five. Five very good give him a round of applause now let me ask you
this lets say that Brian did not know what went in that blank. Ok let's say he thought
the answer was four Matt how do you think Brian is going to do in Calculus "probably
about as good as I would" ok not very well is he? What if he had to think about this
for a while? Do you think he's going to do good in calculus no. What if he thought the
answer was negative two, or what if he thought the answer was pie, or fourteen ninety two,
or Abraham Lincoln if he doesn't know what goes in that blank and if he know it quickly
he is going to flunk calculus in a very bad way am I correct? Alright you have to know
this you have to know this now you don't know the full implications of everything I'm telling
you right now ok. Remember when you learned your multiplication tables when you're a kid
and you would learn that two times three equals six right there was a point in your learning
that you just memorized that two times three equals six later on you might have realized
that three times two also equals six, or six divided by three equals two, or six divided
by two is three, or if you have six cookies and three friends you each get two cookies,
or that you can even graphically represent three times two by going three rows of two
or two rows of three right? But at some point in your learning you just had to memorize
three times two equals six correct? And then that other thing came about with more knowledge
that's where you are now you don't fully understand the implications when I say that cash is a
debit balance account notes payable is a credit balance account, but you need to learn this.
If you don't learn this you will not do good in this class. I used to do tutoring when
I was at Kansas State University and I would get I'd have a student call me and they were
in chapter four or five and they would be flunking the class and they would call for
help and so I would go over there and try and help them the first thing that I would
do is I would give them a quiz on their account balances to see if they knew which accounts
are debit balance accounts which accounts were credit balance accounts and they didn't
know it I told them that they you should probably should just drop the class. Just like Brian
I would tell you if you don't know how to count to ten should you be taking calculus
no. Can I say this this strong enough you folks at home you need to make your flashcards
I'm going to email you a list or it will be posted under chapter two on angel a list of
the accounts and what their balance is so that you can use that to make your own flash
cards ok. I will give this to you guys as well but you need to know which accounts are
debit balance accounts and which accounts are credit balance accounts. Here's how you'll
know somebodies flunking this class if in three weeks from now if I'm working with someone
and I go hey John "ok work with me is cash a debit balance account or a credit balance
account? Oh it's a um debit credit no uh debit? No John you're flunking right? If I ask you
your middle name do you have to think about it? No you know it that's what I want you
to be with these accounts. Cash debit balance account it increase with the debit decreases
with the credit, notes payable it's a credit balance account it increases with the credit
and decreases with the debit, you understand? Can I make this anymore clear alright make
your flash cards the difference is not between those who want to do flash cards and those
who don't the difference between those who by the time they go to bed tonight versus
those I'm going to do it tomorrow or next week. No do it tonight before you go to bed
have your flash cards I showed you an example what they could look like. Alright one last
thing I will let you go is let me give you your homework ok and do them in this order
if you would but I want you to do quick study two point one two point four two point five
two point three, but more important than that I want you to make flash cards ok are you
with me? Alright guys this is an important lecture watch it again if you have to well
see you later bye-bye.