Nothing: Accounts Receivable and Sole Proprietorship Essay

Submitted By jkeadle
Words: 692
Pages: 3

Asset Accounts Account No. | To Increase | Account Title | Description of Account | 101 | Debit | Cash | Checking acct balance. Currency, coin, check received and not yet deposited. | 102 | Debit | Accounts Receivable | Amounts owed to the company for services performed/products sold and not yet paid for | 103 | Debit | Supplies | Cost of Supplies that HAVE NOT YET BEEN USED. | 104 | Debit | Equipment | Cost to acquire and prepare equipment for use by the company | 105 | Debit | Buildings | Cost to purchase or construct buildings for use by the company |

Liability Accounts Account No. | To Increase | Account Title | Description of Account | 1501 | Credit | Accounts Payable | Amounts owed to suppliers who provided goods and services to the company but did not require immediate payment in cash | 1502 | Credit | Notes Payable | The amount of principal due on a formal written promise to pay. Loans from banks are included in this account | 1503 | Credit | Unearned Revenues | Amounts received in advance of delivering goods or providing services. When goods are delivered, this liability amount will decrease. |

For my business I have chosen catering because I am very personable, and I like food. What better than to have two in one and be able to interact with people and work with food. For my chart of accounts, starting with my Asset Accounts I have included Cash, Accounts Receivable, Supplies, Equipment, and Buildings. Cash for when my customers pay by cash or by check. Accounts Receivable will be helpful for when we have catered to a party, company, etc. and they have yet to pay us. Supplies are for the items that we keep stocked and have not used yet. Equipment is needed for the stoves with ovens, refrigerator and any other things purchased on behalf of the company. The buildings account is simply for the costs of any storefront we purchase to house our catering company. Liability Accounts I have included; Accounts payable will be used for paying the company who supplies us with our food, or any other type of supplier. Notes payable will be used for any loans taken out to help purchase equipment or items for the catering company. Finally, unearned revenues will be useful for any customer who pays up front before a scheduled catering, or anyone/ any company who pays up front. The amounts would then decrease after the goods or services are provided. My catering business will be a sole proprietorship. I chose sole proprietorship over partnership because I like to work independently, and I like being in control of all things going on for my business. Some pros of having a sole proprietorship are that it is owned and operated by one…