1. Transactions That Affect Revenue, Expenses, and Withdrawals
Chapter 5 $ $
Transactions That Affect Revenue, Expenses, and Withdrawals $ $

2. Chapter 5 $
Section 1 Relationship of Revenue, Expenses, and Withdrawals to Owner’s Equity $
What You’ll Learn
The reason for having temporary and permanent accounts.
The rules of debit and credit for the revenue, expense, and withdrawals accounts. $ $

3. $ $ $ $ Why It’s Important Key Terms Chapter 5
The proper handling of transactions that affect temporary and permanent accounts is essential to maintaining accurate financial records. $ $
Key Terms
temporary capital accounts
permanent accounts $

4. $ $ $ $ Temporary Capital Accounts Chapter 5 Revenue Expense
Accounts that are used to collect information for a single accounting period.
Revenue
Expense
Withdrawals $ $ $

5. $ $ $ $ Temporary Capital Accounts Chapter 5
At the end of the accounting period, the balances in the temporary capital accounts are transferred to the owner’s capital account. $ $ $

6. Chapter 5 $
The Relationship of Temporary Capital Accounts to the Owner’s Capital Account $
Utilities Expense
Accumulated telephone
costs for accounting
period $2,857
Accumulated electricity
period 5,141
Total for accounting
period $7,998 $
Utilities Expense balance transferred to Owner’s Capital at end of accounting period. Expenses decrease owner’s capital. $
Owner’s Capital
Balance at Beginning of
Accounting Period $90,000
Balance at End of
Accounting Period $82,002
Balance of Utilities
Expense $7,998

7. $ $ $ $ Temporary Capital Accounts Chapter 5
What are some examples of a Revenue account?
Delivery Revenue
Sales Revenue $ $ $

8. $ $ $ $ Temporary Capital Accounts Chapter 5
What are some examples of an Expense account?
Advertising Expense
Rent Expense
Utilities Expense $ $ $

9. $ $ $ $ Temporary Capital Accounts Chapter 5
What is an example of a Withdrawal account?
Owner, Withdrawal $ $ $

10. $ $ $ $ Permanent Accounts Chapter 5
Permanent accounts are continuous from one accounting period to the next.
Examples:
Owner’s capital account
Asset and liability accounts $ $ $

11. Let’s quickly review the t account for Owner’s Equity
Chapter 5 $
Let’s quickly review the t account for Owner’s Equity $ $
Owner’s Equity
Debit –
Decrease Side
Credit +
Increase Side
Normal Balance $

12. $ $ $ $ Rules for Revenue Accounts Chapter 5
Revenue earned from selling goods or services increases owner’s capital. $ $
Revenue Accounts
Debit –
Decrease Side
Credit +
Increase Side
Normal Balance $

13. $ $ $ $ Rules for Expense Accounts Chapter 5
Expenses decrease owner’s capital. $
Expense Accounts $
Debit +
Increase Side
Normal Balance
Credit –
Decrease Side $

14. $ $ $ $ Rules for the Withdrawals Account Chapter 5
A withdrawal is an amount of money or an asset the owner takes out of the business. $ $
Withdrawals Accounts
Debit +
Increase Side
Normal Balance
Credit –
Decrease Side $