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    P1-Single Entry Formulas

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    John Yrick Era
    This document discusses single entry accounting and the computation of net income using single entry methods for sole proprietorships, partnerships, and corporations. It provides formulas for calculating net income under the cash and accrual bases of accounting by analyzing changes in asset, liability, equity, and income accounts. Key aspects covered include the treatment of receivables, payables, prepaid and accrued items, and depreciation expense.

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    P1-Single Entry Formulas

    Uploaded by

    John Yrick Era
    313 views3 pages
    This document discusses single entry accounting and the computation of net income using single entry methods for sole proprietorships, partnerships, and corporations. It provides formulas for calculating net income under the cash and accrual bases of accounting by analyzing changes in asset, liability, equity, and income accounts. Key aspects covered include the treatment of receivables, payables, prepaid and accrued items, and depreciation expense.

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    This document discusses single entry accounting and the computation of net income using single entry methods for sole proprietorships, partnerships, and corporations. It provides formulas for calculating net income under the cash and accrual bases of accounting by analyzing changes in asset, liability, equity, and income accounts. Key aspects covered include the treatment of receivables, payables, prepaid and accrued items, and depreciation expense.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    313 views3 pages

    P1-Single Entry Formulas

    Uploaded by

    John Yrick Era
    This document discusses single entry accounting and the computation of net income using single entry methods for sole proprietorships, partnerships, and corporations. It provides formulas for calculating net income under the cash and accrual bases of accounting by analyzing changes in asset, liability, equity, and income accounts. Key aspects covered include the treatment of receivables, payables, prepaid and accrued items, and depreciation expense.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 3

    PRACTICAL ACCOUNTING 1 Era-CPAR Resources

    Topic: SINGLE ENTRY

    1. Computation of net income using Single Entry Method

    A. For Single Proprietorship and Partnership

    Increase/Decrease in Net Assets:


    Capital balance, end Pxx
    Capital balance, beginning (xx) Pxx

    Withdrawals xx
    Additional Investments / Contributions ( xx)
    Net Income Pxx

    B. For Corporation

    Increase/Decrease in Retained earnings:


    Retained earnings, end Pxx
    Retained earnings, beginning (xx) Pxx

    Dividends declared xx
    Net Income Pxx

    2. Computation of Net Income by Analyzing


    Changes in Account Balances

    A. For Single Proprietorship and Partnership

    Dr(Cr)
    Increase in Assets Pxx
    Decrease in Assets (xx)
    Increase in Liabilities (xx)
    Decrease in Liabilities xx
    Increase in Net Assets xx
    Withdrawals xx
    Additional Investments/Contributions (xx)
    Net Income Pxx

    B. For Corporation

    Dr(Cr)
    Increase in Assets Pxx
    Decrease in Assets (xx)
    Increase in Liabilities (xx)
    Decrease in Liabilities xx
    Increase in Stockholders’ Equity xx
    Increase in Contributed Capital (xx)
    Decrease in Contributed Capital xx
    Increase in Retained Earnings xx
    Add: Dividends declared xx
    Net Income Pxx
    1
    PRACTICAL ACCOUNTING 1 Era-CPAR Resources

    Cash vs. Accrual

    Formulas:
    Cash Basis Accrual Basis
    1. Total Sales

    Cash Sales xx xx
    Add: Sales on account:
    AR and NR, end xx
    Collections of AR /NR xx xx
    NR Discounted xx
    Write off xx
    Sales returns and allowances xx
    Sales discounts xx
    AR and NR, beginning . . (xx)
    Total Sales xx xx

    Cash Basis Accrual Basis


    2. Total Purchases

    Cash Purchases xx xx
    Add: Purchases on account:
    AP and NP, end xx
    Payments on AP/NP xx xx
    Purchase returns and allowances xx
    Purchase discounts
    AP and NP, beginning . . (xx)
    Total Purchases xx xx

    Cash Basis Accrual Basis


    3. Expenses in General

    Expenses Paid xx xx
    Add/(Deduct):
    Prepaid expenses, beginning xx
    Accrued expenses, end xx
    Prepaid expenses, end (xx)
    Accrued expenses, beginning . . (xx)
    Total Expenses Incurred xx xx

    Cash Basis Accrual Basis


    4. Other Income

    Income (cash) received xx xx


    Add/(Deduct):
    Unearned income, beginning xx
    Accrued income, end xx
    Unearned income, end (xx)
    Accrued income, beginning . . (xx)
    Total Income Earned xx xx

    5. Depreciation (applicable to cash and accrual basis)

    PPE beg xx
    Add: Acquisition / Purchase of PPE xx
    Total xx
    2
    PRACTICAL ACCOUNTING 1 Era-CPAR Resources
    Less: PPE end xx
    Sale or Disposal of PPE xx xx
    Depreciation expense xx

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