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By Jeffry R. Haber

ISBN-10: 0814407900

ISBN-13: 9780814407905

For brand new scholars of accounting, entry-level accounting pros, and enterprise pros whose personal paintings relates on to the numbers at the ledger, a simple realizing of middle accounting services and files is important. Accounting Demystified presents an easy and easy description of common parts of the accounting strategy, plus available tutorials in developing, studying, and utilizing monetary statements. Haber's transparent language will allow readers: * comprehend accounting fundamentals * locate mistakes quick * organize actual monetary statements * learn monetary files * make sure the monetary overall healthiness of a enterprise * arrange a monetary prospectus for power traders and creditors From the study room to the again room to the board room, Accounting Demystified serves as a precious primer at the fundamentals of accounting and the needs they serve."

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It is customary to draw a line before writing the balance. Today, general ledger pages often do not have a large T drawn on them, but the essential information remains the same—the name of the account, debits in a column on the left, and credits in a column on the right. There can be additional columns FIGURE 3-4 Cash 10,000 20,000 5,000 20,000 15,000 19 The Accounting Process FIGURE 3-5 Cash 10,000 20,000 5,000 15,000 35,000 15,000 20,000 for a running balance (see Figure 3-6), or the balance can be written under the larger side.

In the business-to-business world, when you make a sale to a customer and the customer is billed, the entry to record the sale is: XX/XX/XX Accounts receivable 1,500 Sales 1,500 To record sale on account When payment is received, the entry is: XX/XX/XX Cash Accounts receivable 1,500 1,500 To record payment on account If the payment is for less than the full amount owed, then you simply record the amount of the actual payment rather than the full amount owed. The difference between the full amount and the amount owed is the amount still owed by the customer.

The Balance Sheet contains the assets, liabilities, and equity accounts (think BALE—Balance sheet: Assets, Liabilities, and Equity). The Income Statement contains the revenues and expenses (think IRE—Income statement: Revenues and Expenses). Every account can be classified as an asset, liability, equity account, revenue, or expense. As a general rule, assets are things that you own, such as cash, inventory, investments, land, buildings, and equipment, and things that are owed to you, such as accounts receivable and notes receivable.

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Accounting Demystified by Jeffry R. Haber

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