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Adjusting Entries

What are adjusting entries? At the end of the period (whether it is a year, a quarter, or a month), we must follow some specific rules. There are transactions in the accounting cycle that expand beyond one period. For example, when we pay rent every 10th of the month, we live in an apartment...


Accounting Equation

What is the Accounting Equation? ASSETS = LIABILITIES + STOCKHOLDERS’ EQUITY This is the accounting equation. All of accounting comes to this. Stockholders’ Equity represents what the owners own from the company’s assets. Liabilities represents what the creditors...


Accounting Principles and Assumptions

What are accounting principles? What are accounting assumptions? Accounting Principles What is Cost Principle? Cost Principle (this principle tells us that we record everything at cost. If you buy a building for $100,000, you record it at $100,000. Simple as that.) What is Revenue...