5 - Contra Accounts - Understanding Them & Examples

Accounting 101 with Jimmy Stewart

#James Stewart #Journal Entry #Higher Education #Podcasting Education

26:46

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for 7 år siden 16:21

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Today we will explain contra accounts, and we will also do some examples to demonstrate how the debits and credits work.

19 episoder

Accounting 101 with Jimmy Stewart

5 - Contra Accounts - Understanding Them & Examples

Accounting 101 with Jimmy Stewart

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published for 7 år siden

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MP3•Episode hjem

Today we will explain contra accounts, and we will also do some examples to demonstrate how the debits and credits work.

19 episoder

#James Stewart #Journal Entry #Higher Education #Podcasting Education

Alle episoder

1
17 - The Objectives of Financial Reporting & Concepts of Accrual Accounting 14:30

for 5 years siden14:30

14:30

I've read a lot of boring stuff so that you don't have to! Today we will summarize some of the useful information in the FASB Concepts Statements and other literature. This information will be useful as you move along to more advanced levels of accounting.

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16 - Closing the Books at the End of the Period (The Closing Process) 11:43

for 6 years siden11:43

11:43

Example: You own a sole proprietorship. For this period, you had revenue of $100,000, wage expense of $40,000, and computer expense of $30,000 (net income of $30,000). You also contributed $10,000 to the business this period. Step 1 – Transfer Revenue and Expense items to Income Summary Debit Credit Revenue $100,000 Income Summary $100,000 Income Summary $40,000 Wage Expense $40,000 Income Summary $30,000 Computer Expense $30,000 Step 2 – Transfer Income Summary to Equity (capital account) Debit Credit Income Summary $30,000 Capital Account – YOUR NAME $30,000 Step 3 – Transfer contribution/distribution accounts to capital account Debit Credit Contributions – YOUR NAME $10,000 Capital Account – YOUR NAME $10,000…

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15 - Adjusting Journal Entries (The Adjusting Process) 9:40

for 6 years siden9:40

9:40

Today we will go over the adjusting process. This is where we make our adjusting journal entries to get from our unadjusted trial balance to our adjusted trial balance, which contains the figures we use on the financial statements and tax returns. We will briefly discuss prepaid expenses, unearned revenues, accrued revenues, accrued expenses, and depreciation/amortization.…

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14 - An Overview of the Accounting Cycle 6:55

for 6 years siden6:55

6:55

Today we will discuss the accounting cycle. This is the process taken each period to record transactions, prepare the financial statements, and to reset the temporary accounts to zero for the next period. Keep in mind that the steps you may see in your accounting textbook or elsewhere may be slightly different - I have simplified some of the steps: Step 1 – Record transactions as journal entries in the general ledger; Step 2 – Prepare an unadjusted trial balance as of the end of the period; Step 3 – Prepare adjusting journal entries and record on general ledger; Step 4 – Prepare an adjusted trial balance as of the end of the period; Step 5 – Prepare the financial statements; Step 6 – Prepare and record closing journal entries to reset temporary accounts; Step 7 – Prepare a post-closing trial balance.…

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13 - How to Dominate Indirect Cash Flow Statements (Fake Cash Method) 11:01

for 6 years siden11:01

11:01

Example # 1 Our Accounts Receivable balance increased by $20,000 from the end of last period to the end of this period. 1. Accounts Receivable is an asset, so it must be debited to increase its balance. 2. Create journal entry: Debit Credit Accounts Receivable $20,000 Fake Cash $20,000 3. A $20,000 increase in Accounts Receivable = $20,000 cash flow reduction on the statement of cash flows. Example # 2 Our Accounts Payable balance increased by $10,000 from the end of last period to the end of this period. 1. Accounts Payable is a liability, so it must be credited to increase its balance. 2. Create journal entry: Debit Credit Fake Cash $10,000 Accounts Payable $10,000 3. A $10,000 increase in Accounts Payable = $10,000 cash flow increase on the statement of cash flows. Example # 3 Our Accrued Expense Payable decreased by $25,000 from the end of last period to the end of this period. 1. Accrued Expense Payable is a liability, so it must be debited to decrease its balance. 2. Create journal entry: Debit Credit Accrued Expense Payable $25,000 Fake Cash $25,000 3. A $25,000 reduction to Accrued Expense Payable = $25,000 cash flow decrease on the statement of cash flows.…

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12 - FIFO & LIFO (Cost Layering Methods) 26:08

for 6 years siden26:08

26:08

Today we will discuss the cost layering methods that are used within the periodic and perpetual inventory systems. Assumptions for purchases: 50 units purchased on January 1 at $10 each (50 x $10 = $500) 100 units purchased on February 1 at $11 each (100 x $11 = $1,100) 150 units purchased on March 1 at $12 each (150 x $12 = $1,800) Assumptions for sales: 250 units sold to customer on April 1 for $5,000 Journal entries to record purchases under Periodic Method (entry is the same whether LIFO or FIFO is being used): January 1: Debit Purchases $500; Credit Accounts Payable $500 February 1: Debit Purchases $1,100; Credit Accounts Payable $1,100 March 1: Debit Purchases $1,800; Credit Accounts Payable $1,800 Total Debits to Purchases = $3,400 ($500 + $1,100 + $1,800) Journal entries to record purchases under the Perpetual Method (entry is the same whether FIFO or LIFO is being used): January 1: Debit Inventory $500; Credit Accounts Payable $500 February 1: Debit Inventory $1,100; Credit Accounts Payable $1,100 March 1: Debit Inventory $1,800; Credit Accounts Payable $1,800 Total Debits to Inventory = $3,400 ($500 + $1,100 + $1,800) Journal entry to record sale - Periodic Method (entry is the same whether using FIFO or LIFO): April 1: Debit Accounts Receivable $5,000; Credit Revenue $5,000 Adjusting journal entry to record Cost of Goods Sold and Inventory - Periodic Method (Using FIFO): December 31: Debit Inventory $600 (for ending inventory); Debit Cost of Goods Sold for $2,800; Credit Purchases for $3,400; Credit Inventory for $0 (for beginning inventory) Adjusting journal entry to record Cost of Goods Sold and Inventory - Periodic Method (Using LIFO): December 31: Debit Inventory $500 (for ending inventory); Debit Cost of Goods Sold for $2,900; Credit Purchases for $3,400; Credit Inventory for $0 (for beginning inventory) Journal entries to record sale - Perpetual Method (FIFO): April 1: Debit Accounts Receivable $5,000; Credit Revenue $5,000 April 1: Debit Cost of Goods Sold $2,800; Credit Inventory $2,800 Journal entries to record sale - Perpetual Method (LIFO): April 1: Debit Accounts Receivable $5,000; Credit Revenue $5,000 April 1: Debit Cost of Goods Sold $2,900; Credit Inventory $2,900…

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11 - Perpetual & Periodic Inventory Methods & Cost of Goods Sold 17:13

for 6 years siden17:13

17:13

In this episode, we will cover the journal entries made when using the perpetual and periodic inventory methods, and we will also go over the formula and journal entry to record cost of goods sold under the periodic inventory method.

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10 - Depreciation, Amortization, & Fixed Assets 28:00

for 6 years siden28:00

28:00

Today we tackle depreciation and amortization, and we discuss fixed assets. Facts for following examples: Asset cost of $85,000, salvage value of $10,000, and a useful life of 5 years. Note: "Depr" represents depreciation expense, "A/D" represents accumulated depreciation, and "B/V" represents book value at the end of the year. I tried to align the columns as best as I could, but they appear differently on different platforms. Assuming the asset was put into service January 1 of year 1 and utilizing the straight line method: Year Factor Depr A/D B/V 1 0.2 15,000 15,000 70,000 2 0.2 15,000 30,000 55,000 3 0.2 15,000 45,000 40,000 4 0.2 15,000 60,000 25,000 5 0.2 15,000 75,000 10,000 Assuming the asset was put into service October 1 of year 1 and utilizing the straight line method: Year Factor Depr A/D B/V 1 0.2 3,250 3,750 81,250 2 0.2 15,000 18,750 66,250 3 0.2 15,000 33,750 51,250 4 0.2 15,000 48,750 36,250 5 0.2 15,000 63,750 21,250 6 0.2 11,250 75,000 10,000 Assuming the asset was put into service January 1 of year 1 and utilizing the double declining (don't!) balance method: Year Factor Depr A/D B/V 1 0.4 34,000 34,000 51,000 2 0.4 20,400 54,400 30,600 3 0.4 12,240 66,640 18,360 4 0.4 7,344 73,984 11,016 5 0.4 1,016 75,000 10,000 Assuming the asset was put into service January 1 of year 1 and utilizing the sum of the years' digits method: Year Factor Depr A/D B/V 1 5/15 25,000 25,000 60,000 2 4/15 20,000 45,000 40,000 3 3/15 15,000 60,000 25,000 4 2/15 10,000 70,000 15,000 5 1/15 5,000 75,000 10,000…

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9 - Unearned Revenue (Deferred Revenue) 7:59

for 6 years siden7:59

7:59

In this episode, we discuss unearned revenue.

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8 - Prepaid Expenses (Prepaid Assets) 7:17

for 6 years siden7:17

7:17

Today we will discuss prepaid assets, and do some examples with journal entries.

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7 - Accounts Payable - Purchases, Payments, Discounts, & Agings 13:48

for 7 years siden13:48

13:48

In this episode, we will discuss accounts payable and journal entries related to accounts payable.

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6 - Accounts Receivable - Sales, Collections, Discounts, Agings, & Write-Offs 13:45

for 7 years siden13:45

13:45

In this episode, we will describe accounts receivable, and we will go over journal entries related to accounts receivable.

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5 - Contra Accounts - Understanding Them & Examples 16:21

for 7 years siden16:21

16:21

Today we will explain contra accounts, and we will also do some examples to demonstrate how the debits and credits work.

1
4 - An Introduction to Financial Statements 23:01

for 7 years siden23:01

23:01

In this episode, we will briefly discuss the four main financial statements in accounting: the balance sheet, income statement, statement of owner's equity, and statement of cash flows.

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3 - General Ledgers & Trial Balances 12:06

for 7 years siden12:06

12:06

In this episode, we discuss the flow of accounting from how our journal entries are recorded in the general ledger, summarized in the trial balance, and then presented on the financial statements and tax returns.

Accounting 101 with Jimmy Stewart

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2 - A|LE-R|E & Journal Entries 17:01

for 7 years siden17:01

17:01

In this episode, we discuss how each type of account in ALE-RE is affected by journal entries, and we learn the debit/credit language of accounting using A|LE-R|E. The lines separate the types of accounts with normal debit balances from those with normal credit balances. This is the most important episode to listen to if you are just learning accounting. Example Journal Entry: Dr. Cr. Utilities Expense 150 Accounts Payable 150…

Accounting 101 with Jimmy Stewart

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1 - Assets, Liabilities, Equity, Revenue, & Expenses (ALE-RE) 6:56

for 7 years siden6:56

6:56

In this episode, we briefly discuss each type of account in accounting: Assets, Liabilities, Equity, Revenue, and Expenses.

Accounting 101 with Jimmy Stewart

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0 - Introduction 2:46

for 7 years siden2:46