Makeup Magic General Journal

Makeup Magic General Journal
Student Name
University
Course
Professor Name
Date
Makeup Magic General Journal
General journals are the books of accounts that bookkeepers use to record firms’ raw transactions. The accountants record these business dealings chronologically by following the dates they happened (Tiron-Tudor et al., 2021). Therefore, a general journal is an initial place where a company records its transactions. After preparing the general journals, bookkeepers post the total amounts to relevant accounts, including payables, equipment, utilities expense, accumulated depreciation, cash account, depreciation expense, notes payable, and asset accounts.
Sometimes, expenses expire. Costs expire when organizations completely get or consume expenditures’ benefits, which may lead to income generation. According to Accounting Tools (2023), “an expired cost is a cost that has been recognized as an expense” (para 1). Occasionally, firms interpret expired expenses as total losses in their assets’ values. For instance, Makeup Magic purchased three months of advertising services at $900 to be displayed in the local newspaper and various websites. The firm should record this expense as prepaid advertising in November. Since at the end of the month, Makeup Magic has been displayed in the local newspaper and various websites for one month only, it should charge a one-month advertising expense. The one-month cost is $900/3, which is $300. The $300 becomes the expired expense in November, hence changes from prepaid advertising to advertising expense.
Makeup Magic started its business with a common stock of $5,000. Reber et al. (2022) assert that common stock entitles the owners of a corporation to dividends. These company payments differ in amounts, and the owners might miss them because it depends on the firm's fortunes. Dividends are the retained earnings and incomes' portions that corporations pay out to their stockholders (Reber et al., 2022). Once firms make profits and accrue enough retained earnings, they decide to either pay them out to the investors as dividends or reinvest them in the business.
Makeup Magic General Journal
for the Month of November, 2017
Date

DESCRIPTION

P/R

DEBIT ($)

CREDIT ($)

November

1

Cash
Common Stock

...