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Accounts by Mind Map: Accounts

1. What is O.E. and drawings?

1.1. Owner's Equity - The residual interest in the assets of the entity after deducting all the liabilities (What you gain) Drawings - Owner’s draws or withdrawals of cash for the owner’s personal use. May result in net decrease or increase.

2. What is an asset?

2.1. An asset is a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide a future benefit. (What you own)

3. 1. Assets

4. 2. Liabilities

5. 4. Revenues & Expenses

6. 3. Owner's equity & drawings

7. How to calculate

7.1. Equity + liabilities = Assets

8. Types of Assets

8.1. Fixed Assets - long term economic resources (I.E: plants, equipment, buildings)

8.2. Financial Assets - Investments in the assets and securities of other establishments (I.E: stocks, sovereign, corporate bonds)

8.3. Current Assets - short term economic resources that can convert into cash within a year (I.E: bank, accounts receivable, inventory)

8.4. Intangible Assets - Economical resources that aren’t physically present (I.E: patents, trademarks, copyrights & goodwill)

9. Where to find assets

9.1. Journal entries - on the debit column

9.2. T-ledgers - with liquidable titles and complete debit balances

9.3. Trial balance - first listed with debit balances

9.4. Balance sheet - First/Left column listed by liquidity

10. What is a liability?

10.1. A company's legal financial debts or obligations that develop during the period of business operations. (What you owe)

11. How to calculate

11.1. Assets - Equity = Liabilities

12. Types of liabilities

12.1. -Long term payable (over 15 years) -Short term payable (within a year)

13. Where to find liabilities

13.1. Balance Sheet - Top of 2nd column with listed accounts while credit balances are listed to the right

13.2. Trial Balance - Listed after assets with credit balances

13.3. T- accounts - Entries with credit balance and titles with “loan” or “payable”

13.4. Journal entries - Credit account entries with “loan” or “payable” and a credit value

14. How to calculate O.E. & Drawings

14.1. Assets - liabilities = equity, no equation for drawings

15. Other terms for Owner's equity

15.1. - Capital - Owner’s equity - Net worth

16. Where to find

16.1. Drawings : Journal entries, T accounts, Trial balance, and balance sheet

16.2. Equity : Journal entries, T accounts, trial balance, and balance sheet

17. What is revenue and expenses?

17.1. Revenue - The increase of equity from the proceeds of a completed service or products sold (the antonym of expense). Expense - The reduction of equity resulting from the purchase of material to perform a service used to produce revenue. (the antonym of revenue)

18. How to calculate

18.1. Number of products sold x sales price = revenue

19. Examples

19.1. - Expense: fuel, rent, advertising, wages. - Revenue: Sales, fees earned, Interest income, Service revenues

20. Where to find

20.1. Revenue: Journal entries, T-accounts, Trial balance, income statement Expenses: Journal entries, T-accounts, trial balance, income statement