You are on page 1of 3

Assets = Liabilities + Owners Equity

REV/ EXP + Cont.Cap.


+Cash = + C.C.
(When owners invest money in the business)

+Cash = +Share Cap.


(When company issues stock)

+Cash = +Revenues
(When goods are sold for cash)

+Acc. Rec. = +Revenues


(When goods are sold on credit)

-Acc. Rec. =
+Cash
(When we collect Accounts Receivables)

-Cash =
+Inventory
(When we purchase goods for cash)

+Inventory = +Acc. Payables


(When we purchase goods on credit)

-Cash = -Acc Payables


(When we pay off our Acc. Payables)

-Inventory = -Cost of Goods Sold


(When Inventory is sold) (COGS)

+Cash = +Loan Payable


(When we borrow money)

-Cash = -Loan Payable


(When we return the money that was borrowed)
Assets = Liabilities + Owners Equity
REV/EXP + Cont.Cap.
-Cash = -Int. Expense
(When we pay interest on our borrowings)

= +Interest Payable -Int. Expense


(When interest is due but we still havent paid it)

-Cash
+Notes Receivable =
Or +Investments
(When we lend money or invest money)

+Cash
-Notes Rec. =
Or Investments
(When we get back the money we invested or gave to others)

+Cash = +Int. Income


(When we receive interest on our investments)

+Int. Rec. = +Int. Income


(When we are owed interest on our investments, but still havent received it)

+Machine, Property =
Equipment etc
-Cash
(When we purchase large assets for Cash)

+Machine, Property = +Loan Payable


Equipment etc
(When we purchase large assets on credit)

-Accumulated = -Depreciation Exp.


Deprecation
(When we charge depreciation on large assets)
Assets = Liabilities + Owners Equity
REV/EXP + Cont.Cap.
+Prepaid Exp. =
-Cash
(When we pay for an expense in advance of receiving services or benefits)

-Prepaid Expense = -Expenses


(When the services or benefits of an expense are received)

+Cash = +Unearned Revenue


(When we receive revenues in advance of providing services)

= -Unearned Revenue +Revenues


(When we provide the services associated with the revenue)

-Assets
+Cash = +/-Profit or Loss
+Accumulated Dep.

(When Assets are sold)