Entrepreneurship

Mr. Bernstein

Financial Record Keeping, pp 428-436

December 12, 2014

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EntrepreneurshipMr. Bernstein

Accounting SystemsBusinesses keep score

GAAP: Generally Accepted Accounting PrinciplesThe Accounting Equation: Assets = Liabilities + Owner’s Equity

Assets are anything of value (ie cash, equipment, accounts receivable)

Liabilities are anything the business owesOwner’s Equity is the net worth of the business

(Assets – Liabilities = Owner’s Equity)

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EntrepreneurshipMr. Bernstein

Accounting SystemsAccounting Procedures

Create accountsRecord entries into journalsUse cash basis or accrual basisPost to ledgers

Journals should be updated daily if not constantlyJournal entries should be posted to ledgers weekly or more often

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EntrepreneurshipMr. Bernstein

Examples of Accounts for JournalsSalesOffice SuppliesRentUtilitiesPurchasesPayrollDepreciation

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EntrepreneurshipMr. Bernstein

Examples of Accounts for Journals: Payroll Data