yoyoyo who's back once again Who am I'm CPA strength I'm the strongest licensed
CPA in the state of Florida boys getting jacked over here okay you know what it
is man you know you knew what it is oh I love this stuff man I love this yo what
do you do see pH strength besides being strong it's like CPA instead for yo I
educate motivate and inspire teaching the world over accounting basic blocks
basic blocks basic blocks you might know me as having the best place in the world
this is the best place in the world I guess if you don't know about the place
you wouldn't know about me I don't know just hit the playlist made and stuff
best place in the world it has this is number 74 and that's what it is
this is paying rent this is number two this is Road 100 this is a subset of our
of the big playlist accounting for beginners playlist
business subset this is this is which again this is keeping this is where I'm
widget Inc 73 was our first entry we loan it we loan widget Inc some money so
now what do you think has some money in its checking account and what is it
going to do next I've already made changes from the first one like dates
and stuff like that so let's just keep going and I hope you like this boom what
happened oh this is DC ever this is why this is what really why you know me this
this has helped thousands of people thousands of people by this point learn
accounting get jobs like I'm on some for real stuff this is just you know very
subjective I think it's the best place in the world but this is on some real
stuff this has really helped a thousands and thousands of people it helped me get
a CPA license I know that for sure it's a mapping system that I invented let's
go anyways what happened you paid some rent
man I found this widget in Fell's great place for $4,000 I know it's a lot of
money but he said we could have it for like a year maybe two years I don't know
he's kind of like a family friend you know I kind of finessed I kind of
wiggled my way in there we're kind of finessed it up you know so that's how we
do and so anybody's would you dink oh man and I hope you could sell some
widgets for god sakes but widget Inc pays rent for $4,000 out of the check
well we know do we have cash do we have cash checking account yes we do we have
we have four thousand dollars leaving because you're paying rent for our for
our warehouse space so you're paying rent so there's money leaving out of our
checking account so check your account is an asset if it's leaving our our
company that means see if it was positive it was going up it'd be a debit
that's why it's under to happen in the positive form but it's leaving so it's
going to be a credit so it's going to go down because it's going down it's
leaving so four thousand dollars is going to be our credit and our checking
it and our checking account here so we're gonna we're going to put four
thousand dollars in our checking account which goes in an asset box envy asset
box but it's leaving our company so that's why it's a credit it since
leaving now what's gonna be our exhibit pane rent okay so we got money going out
for a service that's gonna that's gonna help us selvages help us make money so
it's like an ordinary in the ordinary course of business
that's an expense money going out in the ordinary course of business which this
is in hopes of making more money that's what the rent is that's what that's what
the money is leaving our business for us for rent and so that accounts going up
because you're getting you're gonna you're gonna get four thousand four
thousand dollars in an expense account you might know because debits have to
equal credits well the rents gonna be a debit but or or you could get this we're
like about account you can get you can skin a cat you know I don't know why you
it's gonna cap what you can get to the problem a multitude of different ways
you might know hey it's an expense because that's what that's what uh the
rent is and things friends so it's a debit so however you might come to it
it's gonna be that's gonna be our debit is four thousand dollars
of rent when I can put rent rent expense we're just gonna put rent
okay and that happens to go in the expense box let make sure I'm recording
yes I'm recording I would hate to not be recording this beautiful stuff so that's
our journal entry on 228 15 that's our journal entry we're paying we're paying
rent we have debit rent $4,000 credit up
checking account $4,000 in 228 that's our journal entry for paying right now
let's go to our chart up let's go to our chart accounts in general ledger you
jump cut back in what are we gonna do now okay what do we have we had checking
account four thousand dollars let's look at the drill they're checking out four
thousand dollars and we had ran a four thousand dollars so we're those in our
chart of accounts the checking account was and the rent in the chart of
accounts was not so we collect the rent in the chart of accounts in the chart of
accounts inside of it what's going on in our specified time range whatever
and our special part time range is one one one fifteen that was the start of
our business let's go let's go with rent because that was the first thing that
happened was that our journal entry that was our debit for four thousand dollars
so we had essence it was a debit that means it was it was going up in the
expense a two 2815 we have four thousand dollars in our rent in the general
ledger in our rent inside of our chart of account of rent now for the fun now
for the fun part is our general ledger we just had what's what's going on in
our general ledger for our checking account we've had two things happened in
our in our checking account since we started since we started our widget in
business look we had a one one fifteen we had ten thousand dollars now we have
now we deducted four thousand dollars right because we have four thousand
dollars leaving our business that's correct right that's our journal journal
entry indicated so we have six thousand dollars in our checking account
currently a two 28:15 we have about six thousand dollars so that's what's in our
debt that's what's in our general ledger yo-yo jump cup yeah yeah alright so we
do we had our journal entry I'm looking down here we have our journal entry
debit four thousand run credit checking account four thousand and that turned
into our chart of accounts we had to add rent from from from that from that
happening as a change our checking account balance to six thousand dollars
and had a rent of four thousand dollars in our general Ledger's from each of
those accounts now let's see what that data with that journal entry that that
made a change in the chart of accounts there add to add grant and then it
changed the general Ledger's for the checking account it brought it brought
the total to six thousand and it made the rent account four thousand dollars
so what we did was we added rent to the rent affected the income
statement the checking account affected the balance sheet and now you'll see why
the net income flows over and makes things work so now our income statement
has has the addition of rent we still don't have any revenue income statement
is revenue minus expenses so all we have is an expense of four thousand dollars
so our net income is negative four thousand dollars and that flows over
from our income statement it flows over to our balance sheet so now we're
balanced you have and then income of negative four thousand dollars we still
have no retained earnings and equity so our equity is negative four thousand
dollars what's our what's our balance sheets
you know assets equal liabilities plus equity what's our assets the only asset
we have in widgets Inc right now is $6,000 in our checking account and this
is on 228 I'm sorry this is on 228 the balance sheet we'll go over that more
but the income statements for a period 0 1 0 1 15 to 228 15 is for the period
it's for a hope for the whole period it's gonna end up being for the whole
year and the balance sheet is just on this day on this day right now so 228 15
in the balance sheet we have our asset of $6,000 and that has to equal because
assets equal liabilities plus equity that has two so our liabilities and
equity has to equal 6,000 does it well what's what's on our liabilities alone
from Cheryl or for $10,000 that didn't change what else is on our balance sheet
well we have negative $4,000 net income net income under the equity so
liabilities and equity equals 6,000 which equals 6,000 the balance sheet
ooop now oh these are definitely gonna be a little rusty I'm like making
changes every single time and I I wanted to do this series earlier but then I
kept on being like oh well making changes and it's not perfect it's not
perfect and I had to think back to you know if you wait till everything's
perfect you're never going to start and that's like one of my things like it's
like a lust Brown quote like you're gonna just jump and grow your wings on
the way down so that's what I'm doing I like jumped off the cliff from started
this series this is the second one on widget Inc I think it's 74 so we're
gonna run up to a hundred on these and you know I'm gonna try to make everyone
better make everyone every widgets Inc better and better and better and if you
liked it please like share subscribe leave a comment like how I can make this
better or maybe what you want to do in a journal entry
and anyways you just have a great great day night evening make the most out of
your day I'll be nice to everyone don't hate be nice alright deuces