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A100 Effect on Statements - Coggle Diagram
A100 Effect on Statements
Unearned Revenue
Increase CASH account in assets and increase UNEARNED REVENUE account in liabilities
once work is completed remove money from UNEARNED REVENUE in liability and put it in REVENUE/SALES in income statement
Depreciation of Fixed Assets
Shown as an increase in depreciation expense on income statement for that year. Assets show acummulatd depreciation of an asset so this increases
Inventory Purchased
Increase INVENTORY asset account and either decrease CASH or increase ACCOUNTS PAYABLE to show money owed in liabilities account
If made on account then when due reduce ACCOUNTS PAYABLE by money owed and reduce CASH by same amount
Inventory Sold
Record the Sale: Increase SALES on income statement and increase either CASH or ACCOUNTS RECEIVABLE
increase COGS on income statement expense and decrease INVENTORY asset account
Land
Purchase
increase asset account LAND and decrease asset account CASH
Sell
reduce LAND asset account by the amount you bought the land for* then increase asset CASH by cash recieved. Excess cash/profit goes to "gain on land sale" on income statement
Supplies
decrease CASH asset account by amount purchased and increase asset account SUPPLIES
after some of the supply has been used you have to adjust: reduce balance in SUPPLIES and increase on income statement SUPPLIES EXPENSE by that amount
Prepaid
Increase PREPAID asset by total value of that then reduce balance in asset account by asset value remaining at end of month. Also need to show this value as an expense (increase expense and decrease asset)
Interest Expense
Increase CASH + NOTES PAYABLE. Then increase INTEREST PAYABLE + INTEREST EXPENSE. Then reduce cash by PRINCIPLE + INTEREST and then reduce both NOTES PAYABLE and INTEREST PAYABLE to 0