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What is Statement of Changes In Owner's Equity? The Statement of changes in owner's equity shows changes in opening capital of the owner’s business over the accounting period. It is also known as Statement of Owner’s Equity . Statement Of Changes In Owner’s Equity Contain Which Accounts The statement of owner’s equity contains begning balance of Capital Account i.e, opening capital, additional investment, Net Income or Net Loss for the period, withdrawals of owners ( Drawings ) and the ending balance of capital account, i.e., ending capital. Does The Statement Of Owner's Equity Contain Only Permanent Accounts It contains Permanent Accounts or Balance Sheet Accounts and also it includes a T emporary Account , which is a Personal Account , named as drawing account.

Accounts Are Arranged In The Ledger And Trial Balance In Which Order? The order in which Accounts are classified / categorized in the Ledgers and Trial Balance preparation is in accordance with their appearance in the Financial Statements . This order is followed Generally in order to prepare financial statement. Firstly, Balance Sheet Accounts (Assets, Liabilities And Stockholders’ Equity or Permanent Accounts) are organized and then Income Statement Accounts (Revenues & Expenses or Temporary Accounts)  are arranged in the Ledgers and Trial Balance. (i) Assets (ii) Liabilities (iii) Stockholders’ Equity (iv) Revenues (v) Expenses Explanation: The arrangement of accounts in ledgers and trial balance  are as: Firstly, Assets are categorized. Secondly, Liabilities. Thirdly, Shareholders’ Equity. Fourthly, Revenues and Fifthly and finally expense accounts are classified in the ledgers preparation.

The Left Side Of A T-Account Is What? The left side of a T-Account is called Debit Side. It is also to be noted that the debit side of an account is called the left side. Both Assets and Expenses Accounts have normal balances on debit or left side in t-accounts, i.e., in debit these accounts are increased. Liabilities, Equity and Revenues have negative balances on debit or left side of t-accounts, i.e., in debit side, these accounts are decreased. The Right Side Of A T-Account Is What? The right side of a T-Account is known as credit side. Moreover, the credit side of an Account is known as the right side. Liabilities, Equity and Revenues have normal balances on right side or credit side in t-accounts. Assets and Expenses have unfavorable balances on right side or credit side of t-accounts.

When the sole proprietor or the company / corporation received a bill for advertising from advertising company, then it creates a Liability for the sole owner or the corporation or the company to pay for advertising expense payable by the sole proprietor or the company or the corporation to the advertising company. The journal entry is shown below:                                                     Advertising Expense a/c  XXX                                                                                                                Accounts Payable a/c  XXX                                                           (Received Bill For Advertising Expense From Advertising Agency) Example: Mr. A is a sole proprietor in his own business. He received a bill from advertising expense of Rs. 10000 forr advertising made during the period. What is the journal entry of receiving a bill of Rs. 10000 and the effect of this transaction on the accounting equation?                

Cash / Check Collected From Customers On Account / Credit Increase Decrease Received cash from customers or clients on account increases Cash Account and decreases Accounts Receivable as we collect cash from customers to whom we sold merchandise / goods or rendered services on account / credit. The journal entry for cash collection is shown below: Collections From Customers / Clients On Account Journal Entry                                                                               Cash a/c  XXX                                                                                                                  Accounts Receivable a/c  XXX                                                                 (Cash Received From Customer On Account) A customer may also sent us cheque / check for the goods sold or services performed on account. In that case, bank account is debited and accounts receivable accoun t / sundry debtors account is credited.

Received Cash / Cheque Or Check For Services Performed Journal Entry When the owner or the company or corporation received Cash or Bank i.e., payment through Cheque / Check against the services performed / rendered, then, we debit cash account or bank account and credit the Service Revenue Account as a Revenue for the business. The journal entry is shown below:                                                                        Cash a/c / Bank a/c  XXX                                                                                                                     Service Revenue a/c  XXX                                                                                          (Services Sold For Cash) Example: Mr. A is a sole owner of his business. He performed services of Rs. 9000 for his clients. What is the journal entry and the effect of this transaction on accounting equation?                                                                                      

The Effect Of Not Recording Adjusting Entry For Office Supplies Used On Financial Statements If the Adjustment for office supplies used during the period was not made then expenses would be too low and assets would be too high because we did not record the Office Supplies Expense Account and Office Supplies On Hand . Moreover, the Net Income is overstated as less expenses are recorded in Income Statement and Assets are overstated in balance sheet as the value of office supplies used is not deducted from office supplies. The adjusting entry for Office Supplies Used during the period is shown below:                                                    Office Supplies Expense a/c  XXX                                                                                                                Office Supplies a/c  XXX                                                                 (Office Supplies Consumed For The Period) The remaining part of office supplies is Offic

Prepaid Advisory Fees Expenses Adjusting Entry When the client paid advisory fee expense in advance to the professional consulting company for getting services which are rendered by the company to the client in future, then such paying of advisory fees expense in advance is a Current Asset for the client’s business and the following journal entry is recorded as shown below: (Assuming, Client’s Business Paid Avisory Fees Expense of Rs. 5000 in advance to the professional consulting company )                                             Advisory Fees Expense Paid In Advance a/c  5000                                                                                                                               Cash a/c  5000                                                                   (Advisory Fees Expense Paid In Advance for the period) When the client’s business actually received the services against the advisory fees expense paid in advance, then the following adjustin

Advisory Fees Expense In Accounting Advisory Fees Expense is an Expense from the point view of client’s business. When the client paid advisory fees to the professional consulting company for getting services, then the following entry is recorded as shown below:                                    (Assuming Client’s Businees Paid Advisory Fees Expense Of Rs. 3000)                                                        Advisory Fee Expense a/c  3000                                                                                                           Cash a/c / Bank a/c  3000                                                                    (Advisory Fees Expense Paid For Cash / Bank) Advisory fees expense is recorded in the Income Statement of the client’s business as it is an Income Statement Account. The journal entry for advisory fees expense paid by cash / bank i.e., through cheque or check, is recorded under both Cash Basis of Accounting System and Accrua

Unearned Advisory Fees Journal Entry When advisory fee received in advance, then it is considered as a Current Liability for the company as still the company does not provide the services against the advisory fees received in advance. Unearned Advisory Fees Adjusting Entry                                        Cash a/c / Bank a/c  XXX                                                                                 Advisory Fees Received In Advance a/c  XXX                                                                    (Advisory Fees Received In Advance) When the company actually delivered the services to its clients, then advisory fees received in advance is closed. The following  adjustin g entry is recorded as shown below:                                           Advisory Fees Received In Advance a/c  XXX                                                                                                     Advisory Fees Received a/c  XXX                          

Order Of Balance Sheet Accounts In Chart Of Accounts In the Chart of Accounts , the Balance Sheet Accounts are normally listed in the order as these accounts are shown in the Balance Sheet i.e., Assets, Liabilities and Shareholders’ Equity. So, the order of Balance Sheet Accounts Shown in the Chart of Accounts is listed below: Balance Sheet Accounts (100) Assets (200) Liabilities (300) Shareholders’ Equity

Advisory Fees Received Meaning In Accounting Advisory fees in accounting means that a professional consulting company provides advice services related to financial and investment matters to it clients against the specified fees. For example, a real estate agent charges fees from its clieent in buying, selling or renting a house. Such fee is known as Real Estate Advisory Fee. When advisory fees received for cash or bank (through check / cheque), then the following journal entry is recorded as shown below: Advisory Fess Earned Journal Entry /  Advisory Fess Received Journal Entry                                                                    Cash a/c / Bank a/c  XXX                                                                                                                 Advisory Received a/c  XXX                                                                        (Advisory Fees Received For Cash / Bank) Advisory Fees Received In Income Statement (Accounting

Opposite of Write Off in Accounting is Write Up. Difference Between Write Off And Write Up Write Off is the reduction in the value of an Asset i.e., when it has zero market value or becomes obsolete and provides no future benefits to the business. Write Up is an increase made to the carrying value or book value of an asset due to the incarease in the market value of  the asset, especially in cae of  acquisition of the business in order to restate the value of Assets and Liabilities to the fair market value.