Nice teaching yo! I liked the way you've man! I wanted to know bout' this bcuz' my teacher took 3-4 months to teach this! But finally I found the right video! Once again thanks mahn!!!
At 8:30 I pounded my head on the desk when you wrote the journal enter for the sales because you did not put the debit, Cash and COGS, next to each other that a bad habit.
Great video. I was wondering how you can reflect the "wages expense" in the "cost of goods sold" account. Or are they 2 separate things that should not be combined?
Something that helps me is to remember DADE CLER (Debit: Asset-Draw: Expense/ Credit:Liability-Equity-Revenue) _ Assets-Liabitlities-Equity= Balance Sheet and Revenues-Expense = Income Statement
In the United States it depends what type of business entity we are talking about. If the business is a C corporation, then the company's profits are taxed and the owner is taxed when they receive a dividend (but if the business doesn't have profits the distribution is a return of capital, reduces the shareholder's tax basis, and isn't taxed unless their tax basis is zero). If the business is a flow-through entity (S corp, partnership, LLC) then the owner is taxed on their share of the company's profits regardless of whether they receive a distribution from the company, and for that reason, distributions to the owner are generally not taxable (but there are exceptions).
When a worker initially works, you increase Wages Expense and increase Wages Payable. Later, when you actually pay the employee the $500, you decrease Cash and decrease Wages Payable (Wages Expense is unaffected).
Edspira Thank you for the clarification because I was really confused on that part. And went directly to the comments hoping to find the answers and here it is. You are awesome.
You still debit the truck/asset account for $15,000. But the credit side would be broken down into two parts. You would credit $5,000 cash and also credit $10,000 to A/P (the amount you financed).
so COGS is also considered in retained earnings? For me it would be easier if you explained it in balance sheet terms, because I am not quite familiar with what goes where.
What happens if not all of the food is sold, but has not spoiled for whatever reason? How do you know how much of that $2000 to offset? It's easy when everything is sold, but I don't see how it would be easily tracked if it wasn't?
Man why is it that every time I click on a video that I searched for using the titles “what is a business journal and general ledger “ the video is always second or third in a playlist that I just can’t seem to find?
I only take issue with calling the food and t-shirts (previous video) inventory. The food must be prepared before it can be sold, just as the t-shirts must be altered to display whatever graphic/logo before it is sold. Before these alterations, I would be inclined to call them supplies. Only after the final product is created do you have inventory to sell.
I'm really not getting the intuition behind the fact that an increase is in cash is a debit and decrease is credit! On my bank statement credit cash increases, and debit cash decreases.
He's using the terms "credit" and "debit" in a nonessential way. To "debit" is to remove something from an account. "Debit my savings account 500 dollars." To "credit" is to add something to an account. "credit me 20 bucks." These are the dictionary definitions of the terms. He's tying the terms to either the left or right side of this equation, and your expected to remember which side of the equation "credit" or "debit" are linked to, regardless of whether you are adding or subtracting cash, inventory, equipment, etc. This is probably why people are getting confused in this video, if you are getting confused at all. And if you aren't getting confused, it's because you see what he's talking about despite his nonessential use of the terms "credit" and "debit." My advice is to ignore him when he's using "credit" and "debit," and just focus on where the money is going and why, and why you need to balance each side of the equation in the journal.
Also, he's just using colors randomly. The colors don't mean anything. This is a bad presentation habit. Otherwise I like the videos, but this is a bad practice when you are teaching.
@@kjsavinelli I'm trying to learn this stuff and understand most of what he went through, up until the end. What he describes as Cost of Goods Sold (COGS), I would have through would have not been an Asset - Debit, but instead, been categorized as an Asset - Credit for Inventory Decrease, and would be balanced by a decrease in Equity on the right side (would that then be a Debit on the right side?), because some of the inventory was decreased. I've studies advanced level calculus having little to no problems, and this crap is kicking my butt...smh.
im actually gonna cry bc im finally getting this
Awesome!
Edspira Thank you!!
I teach accounting at a university. This video is great. I post it for my students in case they want to see more examples or just get more practice.
Thank you for your support. I hope you and your students have an excellent fall semester!
believe me, people like you are blessing.
In the process of viewing all 146 videos to prepare for my interview. Thankyou for beautifully explaining every single concept.
Thank you for your all beautifully explained videos.
Thank you Michael for the great video.
Don Sylvester, Houston, TX
Excellent Professor. Love your teaching videos. God bless you, Sir
I'm literally watching this in 2021!!! thank you super much !!!!
A man that is opening many doors for the others. Thx a lot
Nice teaching yo! I liked the way you've man! I wanted to know bout' this bcuz' my teacher took 3-4 months to teach this! But finally I found the right video! Once again thanks mahn!!!
At 8:30 I pounded my head on the desk when you wrote the journal enter for the sales because you did not put the debit, Cash and COGS, next to each other that a bad habit.
I thought that part was confusing. So how should it have looked?
Cash 4,000
CoGS 2,000
Sales 4,000
Inventory 2,000
?
for selling food for $4000, can you do debit cash $4000 and credit inventory $2000 and revenue $2000?
Great video. I was wondering how you can reflect the "wages expense" in the "cost of goods sold" account. Or are they 2 separate things that should not be combined?
Something that helps me is to remember DADE CLER (Debit: Asset-Draw: Expense/ Credit:Liability-Equity-Revenue) _ Assets-Liabitlities-Equity= Balance Sheet and Revenues-Expense = Income Statement
Thats 👍 great, I learn from this video so much,thanks
No problem! Take care my friend
Very informative. Thank you
Very helpful, thank you so much!
understandable explanation
Once a business is up and running, can the owner just take out the original equity investment without tax consequences?
In the United States it depends what type of business entity we are talking about. If the business is a C corporation, then the company's profits are taxed and the owner is taxed when they receive a dividend (but if the business doesn't have profits the distribution is a return of capital, reduces the shareholder's tax basis, and isn't taxed unless their tax basis is zero). If the business is a flow-through entity (S corp, partnership, LLC) then the owner is taxed on their share of the company's profits regardless of whether they receive a distribution from the company, and for that reason, distributions to the owner are generally not taxable (but there are exceptions).
Fundamentals!
Thank you soo much. You're a life saver!!!!
when we pay 500$ for employee's wages payable, what happened to wages expenses?
When a worker initially works, you increase Wages Expense and increase Wages Payable. Later, when you actually pay the employee the $500, you decrease Cash and decrease Wages Payable (Wages Expense is unaffected).
Edspira Thank you for the clarification because I was really confused on that part. And went directly to the comments hoping to find the answers and here it is. You are awesome.
how does it work if you buy a truck for 15,000 but pay 5,000 upfront and you make payments on the rest?
You still debit the truck/asset account for $15,000. But the credit side would be broken down into two parts. You would credit $5,000 cash and also credit $10,000 to A/P (the amount you financed).
@@prudentwomen thank you!! im doing test corrections and this was same scenario different numbers
why wouldnt the equipment be a credit of equity? is the cash (credit) from the 50000 or is it an extra 6000
Hello, Professor for $ 2000 food can we it expense and put it in Debit
Best Pi
i love you.
Love you too!
LOL
Good video
so COGS is also considered in retained earnings? For me it would be easier if you explained it in balance sheet terms, because I am not quite familiar with what goes where.
so when COGS goes up by 2000 (debit) it means that retained revenue goes down by 2000. Whereas the sales increases the retained revenue by 4000.
Thnx boss
What happens if not all of the food is sold, but has not spoiled for whatever reason? How do you know how much of that $2000 to offset? It's easy when everything is sold, but I don't see how it would be easily tracked if it wasn't?
your best sir
Thanks Bharat!
Sales = revenue! (Correct?)
Yes, sales are a type of revenue account (Sales Revenue)
Man why is it that every time I click on a video that I searched for using the titles “what is a business journal and general ledger “ the video is always second or third in a playlist that I just can’t seem to find?
im literally crying i still cant understand a thing and my exam is tomorrow!! *ps. this is not my yt acc.
I only take issue with calling the food and t-shirts (previous video) inventory. The food must be prepared before it can be sold, just as the t-shirts must be altered to display whatever graphic/logo before it is sold. Before these alterations, I would be inclined to call them supplies. Only after the final product is created do you have inventory to sell.
Love this!
Thank you so much
you're welcome!
So if I invest 50k in a biz, and thus increase my equity my 50k, is that a credit?
I'm really not getting the intuition behind the fact that an increase is in cash is a debit and decrease is credit! On my bank statement credit cash increases, and debit cash decreases.
thank you
He's using the terms "credit" and "debit" in a nonessential way. To "debit" is to remove something from an account. "Debit my savings account 500 dollars." To "credit" is to add something to an account. "credit me 20 bucks." These are the dictionary definitions of the terms. He's tying the terms to either the left or right side of this equation, and your expected to remember which side of the equation "credit" or "debit" are linked to, regardless of whether you are adding or subtracting cash, inventory, equipment, etc. This is probably why people are getting confused in this video, if you are getting confused at all. And if you aren't getting confused, it's because you see what he's talking about despite his nonessential use of the terms "credit" and "debit." My advice is to ignore him when he's using "credit" and "debit," and just focus on where the money is going and why, and why you need to balance each side of the equation in the journal.
Also, he's just using colors randomly. The colors don't mean anything. This is a bad presentation habit. Otherwise I like the videos, but this is a bad practice when you are teaching.
@@kjsavinelli I'm trying to learn this stuff and understand most of what he went through, up until the end. What he describes as Cost of Goods Sold (COGS), I would have through would have not been an Asset - Debit, but instead, been categorized as an Asset - Credit for Inventory Decrease, and would be balanced by a decrease in Equity on the right side (would that then be a Debit on the right side?), because some of the inventory was decreased. I've studies advanced level calculus having little to no problems, and this crap is kicking my butt...smh.
Marry me
Thank you sir :)
theres another mistake edd... inv2000 credit debit cog 2000 is right answer not reverse..
💡💡💡💡💡
Completely Lost me with this one, I was following along until now