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Journal and Adjusting Entries

Journal and Adjusting Entries. Rules To Remember. Accounts are not your checking or saving accounts They are storage devices for your financial transactions

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Journal and Adjusting Entries

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  1. Journal and Adjusting Entries

  2. Rules To Remember • Accounts are not your checking or saving accounts • They are storage devices for your financial transactions • When a Bank “Credits Your Account” for your deposits it is because your money is a Liability to them …. Our transactions are the opposite of the banking transactions

  3. Rules To Remember • Assets have a Normal Balance of DEBIT • To increase an Asset, make a Debit Entry • To decrease an Asset, make a Credit Entry • Liabilities have a Normal Balance of Credit • To increase a Liability, make a Credit Entry • To decrease a Liability, make a Debit Entry

  4. Rules To Remember • Equity has a Normal Balance of Credit • To increase an Equity, make a Credit Entry • To decrease an Equity, make a Debit Entry • Revenues have a Normal Balance of Credit • To increase a Revenue, make a Credit Entry • To decrease a Revenue, make a Debit Entry • Expenses have a Normal Balance of DEBIT • To increase an Expense, make a Debit Entry • To decrease an Expense, make a Credit Entry

  5. Rolon Kern Invested $1,200 in cash and $100 in Office Supplies to start Company

  6. Paid rent 3 months in advance $300

  7. Purchased Office Equip on Account $50

  8. Purchased Office Supplies for Cash $40

  9. Collected $400 in cash for services Rendered

  10. Paid Home Electric Bill from Company Funds $20

  11. Provides services for $100, client will pay next month

  12. Paid wages $60

  13. Placed ad for $70, will pay next month

  14. Balances as of 1-31-07 (Before Adjustments)

  15. Balances as of 1-31-07 (Before Adjustments)

  16. Adjusting EntryOffice Supplies on hand total $6

  17. Adjusting EntryRent Expense For Month $100

  18. Adjusting EntryOffice Equip Depr $20

  19. Adjusting EntryOwe Employees $50 at end of month

  20. Balances as of 1-31-07 (After Adjustments)

  21. Income Stmt & Balance Sheet as of 1-31-07 (After Adjustments)

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