Business accounting is the process of measuring, processing, and communicating financial information related to a business entity to various stakeholders, such as investors, creditors, regulators, and management. The goal of business accounting is to provide accurate and timely information that can be used to make informed decisions about the financial health and performance of the business.

1. David Smith
Business Accounting
Assignment 1: setting up GemStar Corporation
Chart of Accounts
• Deposit at Vendor means all deposits and pre-payments made by any Seller before
closing to its vendors as advance payments with respect to services or merchandise to be
received by the business or with respect to the customers of any seller after the closing.
• Cash is the most liquid asset a company can possess.
• Vehicles is a long-term assist account that reports a company’s cost of automobiles,
trucks, etc.
• Customer Deposit is money from a customer to a company before the company earns it.
Customer deposit accounting means the the funds will be credited. It follows the
accounting principle; the deposit is a current liability that is debited and sales revenue
credited.
• Loan Payable if any portion of the loan is still payable as of the date of a company’s
balance sheet, the remaining balance on the loan is called a loan payable. If the principal
on a loan is payable within the next year, it is classified on the balance sheet as a current
liability.
• Interest Payable is a liability account shown on a company’s balance sheet
• Supplies Inventory are two expenses and assets I have: Supplies are items used to run a
business or make a product, and inventory refers to goods made or purchased for sale.
• Common Stock is a security that represents ownership in a corporation. Holders of
common stock elect the board of directors and vote on corporate policies. – Common
stock is reported in the stockholders equity section of a company’s balance sheet.
• Insurance Expense is the amount a company pays to get an insurance contract and any
additional premium payments. – The payments made by the company is listed as an
expense for the account period.
• Event Revenue means revenue generated in connection with events. Event revenue is
recognized in the month that the event takes place. Event revenue For which
consideration has been received in advance is deferred until the event has taken place.
• Payroll Expense is the amount of salaries and wages paid to employees in exchange for
services rendered by them to a business. – may also be assumed to include the cost of all
related payroll taxes, such as the employers matching payments for Medicare and social
security.
• Equipment Rental Expense is an account in which I stored the year-to-date expense
associated with renting various types of equipment. – the total for this account may
appear as a separate line item in the income statement, or it may be aggregated with other
accounts into a line item with a different designation.
• Depreciation Expense is the allocated portion of the cost of a company’s fixed assets that
are appropriate for the period. – depreciation expense is recognized on the income
statement as a non-cash expense that reduces the company’s net income.
• Office Supplies Expense means that the amount of office supplies that are used in an
office or a small business is charged as an expense and should always be included in

2. every reporting period each year. – all office supplies are considered as a business
expense for as long as they relate to the business.
• Utilities Expense are the cost which the company incurs during a period to avail the
services provided by the public utility companies in the place of operation of the
company like the telephone facility, electricity, gas, water, sewer, etc