Financial Accounting Concepts Essay Example | Topics and Well Written Essays - 500 words - 4

Financial Accounting Concepts - Essay ExampleAdvise to Dr. Leo Krusack on basic accounting procedures for the calendar month of July showing how each work is handled on the accrual basis of accounting -On July 1st, he paid out $1,200 in office rent for the month of July. This is considered as expense for the month of July. .He purchased a new dental chair for $1,300 cash on July 6th. This is capital investment and hence a Balance sheet item. This is not to be considered in the revenue account for July. On July 10th, he purchased $2,000 worth of dental supplies on account. Under the accrual system of accounting only the actual supplies used during the month is considered and not the total purchases. He used $1,300 worth of dental supplies in July. This is an expense for July. On July 10th, he paid an electric bill for $250 This pertains for the month of June and even though paid in July cannot be considered in the revenue account for July under the accrual system of accounting. On J uly 12th, he paid $75 to side an ad in the local newspaper. This is an expense for July. He paid out $1,500 in wages to his hygienist on July 15th and 31st. This is an expense for July. On July 18th, he withdrew $250 for individual(prenominal) expenses. Personal drawings are accounted for in the Balance Sheet when the profits are added to the Capital account.