Accounting Process
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Permanent accounts/Temporary accounts.
Anything in your balance sheet/statement of financial/net worth position: permanent accounts. Own/owe/net worth assets, liabilities, net assets — assets accounts, liability accounts, net assets accounts. cash, prepaid expenses, accounts receivable, furniture and equipment, library collections/accounts payable, notes payable (under 10 years) bonds payable (over 10 years)

Temporary accounts: monthly transactions. Revenues like tax revenues, fines revenue, interest; expenditures like office expense, depreciation expense, utilities expense, interest expense on debt, etc. *REVERT TO ZERO AT THE END OF THE MONTH

Long/Term Capital assets are long term assets, “books $20 less accumulated depreciation = net books $18.
Current assets — in cash.
For things that appreciate and depreciate, record at cost and leave it at cost and appraise it when its time to sell.

Contra asset — used in capitalized assets to record the diminished value of things.
net income = the difference btween all revenue accounts and expense accounts. sum of revenue subtract expenses. net income gets folded into net assets.

General journal = chronological list of all transactions that occur during a time period. Old big ledger books. Once they’re added, post to a specific ledger. Ledgers go to making next statement of financial position.

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