Ch01 Demo Columns and Rows Accounting to FS Wells
This is a demonstration of creating an accounting system in Excel utilizing columns for 'accounts and rows for transactions. This is a very intuitive easy to understand accounting system for both Acct 101 and 201 students. It clearly utilized the fundamental accounting equation: Assets = Liabilities + Owner's Equity. Owners equity is broken down into its sub-accounts: Owner's Capital, Owner's Withdrawals, Revenue and Expenses. After entering transaction for the accounting period (December) the column totals of each account are used to create financial statements: Income Statement, Statement of Owner's Equity and the Balance Sheet. This demonstration explains the formulas used in each respective financials statement, the accounting convention for using $'s and under scoring used by accounting firms across the world. (Textbooks frequently vary on presenting these conventions.) This demonstration shows numbers at two decimal places. This is not the proper convention. Financials are always rounded to the nearest dollar amount.