Whats going on everybody?? CPA Strength
Jonathan Dorn, CPA Licensed CPA state of Florida
we got accounting tips 4. We're going to do some stuff and then work into the
Income Statement, so hopefully this won't be too long
let's get it in, we are going to erase this, because, if nothing else
you can remember. what is it??
DC/ADE/LER ok let's go
DC
ADE
LER
now, if you don't know what those are watch the first one please.
Debit, Credit, Asset, Draw, Expense, Credit Liability, Equity, Revenue. Did i say that right?
Debit, Credit, Asset, Draw, Expense, Liability Equity, Revenue DC/ADE/LER
ok, i did want to change this one one example from last time
i just wanted to have a positive Income Statement
so I want to change this we want to change it TO $500 ok?
the income we got, I'm sorry we want to change the income to $800
because i want a positive Income Statement
so we're going to say that for the service we did we got $800
all right
so anyways, these are positive sides, debits and credits
we did these journal entries in the 3rd video, so I'm going to put a line
down here and we're going to have DEBITS on this side and we're going to
have Credits on the right side
that's pretty much all the journal entry is doing, is just separating the Debits and the
Credits, so, we're going through each journal entry and explain and label them you
you know if they're an: Asset, Draw, Distribution, Expense, Liability, Equity,
Revenue, so we're just going to work is going to go down the list and label
these, so anyways, What do i always say first ??? Let's do let's do cash first !!!!!
because of well every every example i have has cash, but mostly every example
in real life will have cash in it too, so if you know what cash is, what
what category
cash is, and it's in every journal entry. It's going to be one of these one of
these six categories
Ok, so, we know what cash is right??? cash is $$$$ money $$$$$$$
it's an Asset, cash is an Asset
so we know this is an Asset
we know this is an Asset
we know
this is an Asset, and we know this is an Asset
ok
we also know truck is an Asset
yeah
A loan, is a Lability you owe somebody. it's a payable !!!
however, almost every single Liability will have a payable in it
Payable, we owe somebody the loan.
remember, we borrow ten thousand dollars from the bank.
so, this is Liability. What was rent?
we paid that in hopes of making some money
that's an Expense.
what's the service income?
we've got money coming in, thats a Revenue
and
now we've got, the only one we don't have left, is a Draw. ADE LER or Distributions
so that's going to be this
it's pretty much the other side of Equity, but we know,
the Draw, is going to be a Draw, is the Draw account
so
let's do the Income Statement
now, the Income Statement, like it implies is how much income you made during. it is
from a certain period of time
so usually the Income Statement run from the calendar year like
businesses will be so we run from, say January, from January 1st 01/01
will say 15 / 15 now through 12/31/15 and that will be the Income Statement
certain period of time with Income Statement, and this is Income
Statement here. But anyways you're going to have the Income Statement is the
Income Statement its Revenues minus Expenses. So we got eight hundred dollars
we got it
service
Income
$800 - $500 for rent. And this is just kind of uh
I guess accountant speak for a negative number you put the brackets around it so
just put a negative in front so we have 300 of net income
net income
so is there is a very abbreviated Income Statement and now that when when you
start next year you will start a new Income Statement. Income Statements only
for that certain period. anyways
that'll be it for this one. the next one will go over the Balance Sheet.