Jonathan Dorn, CPA Licensed CPA state of Florida

we got accounting tips 4. We're going to do some stuff and then work into the

Income Statement, so hopefully this won't be too long

let's get it in, we are going to erase this, because, if nothing else

you can remember. what is it??

DC/ADE/LER ok let's go

DC

ADE

LER

now, if you don't know what those are watch the first one please.

Debit, Credit, Asset, Draw, Expense, Credit Liability, Equity, Revenue. Did i say that right?

Debit, Credit, Asset, Draw, Expense, Liability Equity, Revenue DC/ADE/LER

ok, i did want to change this one one example from last time

i just wanted to have a positive Income Statement

so I want to change this we want to change it TO $500 ok?

the income we got, I'm sorry we want to change the income to $800

because i want a positive Income Statement

so we're going to say that for the service we did we got $800

all right

so anyways, these are positive sides, debits and credits

we did these journal entries in the 3rd video, so I'm going to put a line

down here and we're going to have DEBITS on this side and we're going to

have Credits on the right side

that's pretty much all the journal entry is doing, is just separating the Debits and the

Credits, so, we're going through each journal entry and explain and label them you

you know if they're an: Asset, Draw, Distribution, Expense, Liability, Equity,

Revenue, so we're just going to work is going to go down the list and label

these, so anyways, What do i always say first ??? Let's do let's do cash first !!!!!

because of well every every example i have has cash, but mostly every example

in real life will have cash in it too, so if you know what cash is, what

what category

cash is, and it's in every journal entry. It's going to be one of these one of

these six categories

Ok, so, we know what cash is right??? cash is $$$$ money $$$$$$$

it's an Asset, cash is an Asset

so we know this is an Asset

we know this is an Asset

we know this is an Asset

we know

this is an Asset, and we know this is an Asset

ok

we also know truck is an Asset

yeah

A loan, is a Lability you owe somebody. it's a payable !!!

however, almost every single Liability will have a payable in it

Payable, we owe somebody the loan.

remember, we borrow ten thousand dollars from the bank.

so, this is Liability. What was rent?

we paid that in hopes of making some money

that's an Expense.

what's the service income?

we've got money coming in, thats a Revenue

and

now we've got, the only one we don't have left, is a Draw. ADE LER or Distributions

so that's going to be this

it's pretty much the other side of Equity, but we know,

the Draw, is going to be a Draw, is the Draw account

so

let's do the Income Statement

now, the Income Statement, like it implies is how much income you made during. it is

from a certain period of time

so usually the Income Statement run from the calendar year like

businesses will be so we run from, say January, from January 1st 01/01

will say 15 / 15 now through 12/31/15 and that will be the Income Statement

certain period of time with Income Statement, and this is Income

Statement here. But anyways you're going to have the Income Statement is the

Income Statement its Revenues minus Expenses. So we got eight hundred dollars

we got it

service

Income

$800 - $500 for rent. And this is just kind of uh

I guess accountant speak for a negative number you put the brackets around it so

just put a negative in front so we have 300 of net income

net income

so is there is a very abbreviated Income Statement and now that when when you

start next year you will start a new Income Statement. Income Statements only

for that certain period. anyways

that'll be it for this one. the next one will go over the Balance Sheet.