PSU ACCOUNTING 211 - DEBITS CREDITS AND EQUITY

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UNIT #4 - DEBITS, CREDITS AND EQUITYINSTRUCTIONSTUTORIAL: INITIALTUTORIAL: COMPLETEDINSTRUCTIONS FOR UNIT #4~ Owners' equity is critical as the numbers show the financial position of the owners', called stockholders, in the corporation. As equity changes, the position of the stockholders changes, and the potential for future growth improves or deteriorates. ~ Initially a company sells stock to obtain capital. It uses the capital to build assets, strengthen its position, maybe borrow more capital, and generate sales.~ To "record" these transactions, it needs a set of accounts to show invested capital, revenues from sales, expenses incurred to produce sales, profit distributed to the stockholder or "dividends" and reinvested profit called "retained earnings". ~ Using the tutorial titled Initial look at the first column on the left. A list of equity accounts is provided. The ones that appear on the balance sheet and the ones that effect or appear on the income statement are listed. ~ To the right are columns titled "a debit will" "a credit will". ~ For each account write increase equity or decrease in the correct cell. If your response is right, the adjoining cell will read "correct". If your response is wrong the adjoining cell will read "not correct". ~ The default settings are "not correct" except for capital stock (credit), dividends (debit), sales (credit), and wage expense (debit).~ When completed, your sheet should have "correct" for debit and credit on each account. The tutorial Completed List shows the correct


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PSU ACCOUNTING 211 - DEBITS CREDITS AND EQUITY

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