1. Accounting Processes
IS 484

2. Concepts

3. Concepts Assets = Liabilities + Equity
Assets: Cash, Inventory, Acct Receivable, Bldg… Debit Increase (+), Credit (-)
Liabilities: Account Payable, Debt. Debit (-), Credit (+)
Equity: Stocks, Revenues, Expenses. Debit (-) Credit (+)

4. Examples of Accounting Entries Debit (left) Credit (right)
1. Purchase a truck using cash for $5,000: Truck $5,000 Cash $5, Pay monthly rent $1,000 in cash Rental Expenses $1,000 Cash $1, Sold inventory for $400 invoice later Account Receivable $400 Inventory $ Customer paid the $400 invoice Cash $400 Account Receivable $400
Exercise: