How the rules of debits and credits apply

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Reference no: EM132984228

Part One:Tell us the type of business.

Many students talk in their Autobiography about wanting to someday start a small business. Use the course text to gather information and understanding on how to answer this question. Assume that you are starting the business of your choice as a corporation with 3 friends as equal shareholders.

Describe for your shareholders the double entry accounting system your business will use and how the rules of debits and credits apply.

Create 4 sample journal entries of your own that you think would be the most likely ones in the first month of the business getting started. You can make up the amounts.

Part Two:

Pick a large company that does business in your community and view their financial results. For the most recent year, list the amounts reported for sales, cost of goods sold, and total net income. Does the amount reported for revenue represent cash received from customers during the year? If not, what does it represent? Is your company a profitable company? How can you tell?

Reference no: EM132984228

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