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.