Accounting 101 with Jimmy Stewart

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.

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                &nbs

 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.&nb

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

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:                           

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

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.

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 t

In this episode, we discuss unearned revenue.

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