ACC 2361 Ch. 2

Long Term Assets

Intangible items that aren't meant to be used within a year. EX: PPE *increase with debit (left)

DEBIT these accounts to INCREASE

"DEAD" -debit -expenses -assets -dividends

PPE (asset)

*Accumulated Depreciation Property, Plant, Equipment (long term assets) *increase with debit (left)

Balance Sheet

*debits must equal credits Tells you if you have enough liquidation to pay off current liabilities Ratio Analysis: (Current Assets / Current Liabilities) Order on B/S: 1. Current Assets, PPE, Totals 2. Current Lib, Long-term Lib, Totals 3. Stockholders' Eq, Total Lib and SE

CREDIT these accounts to INCREASE

-retained earnings -contra-asset account (opposite of regular asset acc.) -liabilities -revenues -common stock

T- Account

ASSETS = LIABILITIES + STOCKHOLDERS' EQUITY __________ = ___________ + ___________ + - - + - + I-debit I-credit I-credit D-credit D-debit D-debit

Current Assets

Accounts Receivable, Cash, Supplies *increase with debit (left)

Stockholders' Equity

Contributed Capital, Retained Earnings *increase with credit (right)

Current Ratio

Current Assets / Current Liabilities

Liabilities (non current)

Long term debt, notes payable (payments past 1 year) *increase with credit (right)

Current Liabilitites

Short term debt, accounts payable (less than a year) *increase with credit (right)

Classified Balance Sheet

Shows subtotals for current assets and current liabilities.