tailieunhanh - Lecture Fundamental accounting principles (20/e): Chapter 2 - Wild, Shaw, Chiappetta

Chapter 2 - Analyzing and recording transactions, after completing this chapter you should be able to: Explain the steps in processing transactions and the role of source documents, describe an account and its use in recording transactions, describe a ledger and a chart of accounts, define debits and credits and explain double-entry accounting. | Chapter 02 ANALYZING AND RECORDING TRANSACTIONS McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. Analyze each transaction and event from source documents ANALYZING AND RECORDING PROCESS Record relevant transactions and events in a journal Post journal information to ledger accounts Prepare and analyze the trial balance C 1 Sales Tickets Bank Statements Purchase Orders Checks SOURCE DOCUMENTS Bills from Suppliers Employee Earnings Records C 1 An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item. THE ACCOUNT AND ITS ANALYSIS The general ledger is a record containing all accounts used by the company. C 2 THE ACCOUNT AND ITS ANALYSIS Owner, Capital Owner, Withdrawals C 2 Land Equipment Buildings Cash Notes Receivable Supplies Prepaid Accounts Accounts Receivable Asset Accounts ASSET ACCOUNTS C 2 Accrued Liabilities Unearned Revenue Notes Payable Accounts Payable Liability Accounts LIABILITY ACCOUNTS C 2 Equity Accounts Revenues Owner’s Capital Owner’s Withdrawals Expenses EQUITY ACCOUNTS C 2 Liabilities Equity Assets = + THE ACCOUNT AND ITS ANALYSIS C 2 LEDGER AND CHART OF ACCOUNTS The ledger is a collection of all accounts for an information system. A company’s size and diversity of operations affect the number of accounts needed. The chart of accounts is a list of all accounts and includes an identifying number for each account. C 3 DEBITS AND CREDITS A T-account represents a ledger account and is a tool used to understand the effects of one or more transactions. C 4 Liabilities Equity Assets = + DOUBLE-ENTRY ACCOUNTING Debit Credit Debit Credit Debit Credit ASSETS + - LIABILITIES - + EQUITIES - + C 4 Normal Normal Normal Revenues Expenses Owner’s Capital Owner's Withdrawals _ + _ Debit Credit Owner’s Capital - + Debit Credit Owner's Withdrawals + - Debit Credit Expenses + - Debit Credit Revenues - + DOUBLE-ENTRY ACCOUNTING Equity C 4 DOUBLE-ENTRY ACCOUNTING An . | Chapter 02 ANALYZING AND RECORDING TRANSACTIONS McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. Analyze each transaction and event from source documents ANALYZING AND RECORDING PROCESS Record relevant transactions and events in a journal Post journal information to ledger accounts Prepare and analyze the trial balance C 1 Sales Tickets Bank Statements Purchase Orders Checks SOURCE DOCUMENTS Bills from Suppliers Employee Earnings Records C 1 An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item. THE ACCOUNT AND ITS ANALYSIS The general ledger is a record containing all accounts used by the company. C 2 THE ACCOUNT AND ITS ANALYSIS Owner, Capital Owner, Withdrawals C 2 Land Equipment Buildings Cash Notes Receivable Supplies Prepaid Accounts Accounts Receivable Asset Accounts ASSET ACCOUNTS C 2 Accrued Liabilities Unearned Revenue Notes Payable Accounts Payable Liability Accounts .