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Fundamentals of Accounting and Business Management

The document discusses key accounting concepts like purchases, sales, inventory, costs of goods sold, income statements, statements of equity, and statements of financial position. Purchases record acquisitions for resale, while sales recognize revenue upon delivery. Cost of goods sold calculates costs removed from inventory to determine gross profit. Income statements and statements of equity report revenues, expenses, and changes in owner's equity. Statements of financial position present assets, liabilities, and owner's capital at a point in time.

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San Juan Ezthie
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
297 views

Fundamentals of Accounting and Business Management

The document discusses key accounting concepts like purchases, sales, inventory, costs of goods sold, income statements, statements of equity, and statements of financial position. Purchases record acquisitions for resale, while sales recognize revenue upon delivery. Cost of goods sold calculates costs removed from inventory to determine gross profit. Income statements and statements of equity report revenues, expenses, and changes in owner's equity. Statements of financial position present assets, liabilities, and owner's capital at a point in time.

Uploaded by

San Juan Ezthie
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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FUNDAMENTALS OF ACCOUNTING AND BUSINESS MANAGEMENT

PURCHASES
- Used to report acquisitions of merchandise for sale.
- Is used to describe the products purchased and intended for sale.
FREIGHT – OUT
- Fee paid regarding the transportation to the buyer of the inventory.
SALES
- Used by trading operations, is recognized when goads are delivered.
PURCHASING ACTIVITY
- Contra - purchase
- PURCHASE RETURNS account title used when some of the merchandise are subsequently
returned.
- PURCHASE ALLOWANCES a contra – account which describe reduction on the acquisition
price due to reason similar to purchase return.
- PURCHASE DISCOUNT a cash discount usually used by the seller in order to encourage
buyers to pay earlier purchases made on account.
DRAWING ACCOUNT
- It is used to record withdrawals of the owner.
SALES ALLOWANCES
- Is a contra – sales account used to report the selling price of goods returned by
customers.
FREIGHT – IN
- Refers to shipping cost necessary to bring inventory purchased from the seller to the
premises of the company.
MERCHANDISE INVENTORY
- It is determined by actual physical count of merchandise owned.
STATEMENT OF CHANGES IN EQUITY
- Is prepared to help the readers understand the transactions that affected the balances of
the equity account.
PURCHASE RETURNS
- Is a contra – purchase account that reports the costs of goods returned to suppliers.

COST OF GOOD SOLD


Merchandise Inventory, Jan 1 xxx
Add: Purchases xxx
Freight – in xxx
Total xxx
Less: Purchase Returns and Allowances (xxx)
Purchase Discount (xxx)
Total Goods Available for Sale xxx
Less: Merchandise Inventory, Dec 31 (xxx)
Cost of Good Sold xxx

NAME OF COMPANY
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED, DEC. 31,

Sales xxx

Less: Sales Returns and Allowances (xxx)

Sales Discount (xxx)

Net Sales xxx

Less: Cost of Good Sold (xxx)

Gross Income/Profit xxx

Less: Expenses (xxx)

Freight – Out (xxx)

Net Income/ Net Loss xxx


NAME OF COMPANY
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENEDED, DEC. 31

Owner’s Capital, Jan 1 xxx

Add: Contributions xxx

Net Income xxx

Less: Owner’s Drawing (xxx)

Owner’s Capital, Dec 31 xxx

NAME OF COMPANY
STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31,
Assets:

Current Assets:

Cash xxx

Accounts Receivable xxx

Less: Allowance for Doubtful Accounts (xxx) xxx

Notes Receivable xxx

Prepaid Expense xxx

Total Current Assets xxx

Non – Current Assets:

Delivery Equipment xxx

PPE xxx

Less: Accumulated Depreciation (xxx) xxx

Total Non – Current Assets xxx

Total Current and Non – Current Assets xxx


Liabilities:

Current Liabilities:

Accounts Payable xxx

Notes Payable xxx

Accrued Interest Payable xxx

Unearned Revenue xxx

Total Current Liabilities xxx

Non – Current Liabilities:

Bonds Payable xxx

Long Term Payable xxx

Total Non – Current Liabilities xxx

Total Current and Non – Current Liabilities xxx

Owner’s Capital xxx

Total Liabilities and Owner’s Equity xxx

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