tailieunhanh - Lecture Financial accounting (3/e): Chapter 2 - Spiceland, Thomas, Herrmann

Chapter 2 - The accounting cycle: During the period. In this chapter you will learn: Identify the basic steps in measuring external transactions, analyze the impact of external transactions on the accounting equation, assess whether the impact of external transactions results in a debit or credit to an account balance, record transactions using debits and credits, post transactions to t-accounts in the general ledger, prepare a trial balance. | The Accounting Cycle: During the Period Chapter 2 1 Learning Objectives Identify the basic steps in measuring external transactions Analyze the impact of external transactions on the accounting equation Assess whether the impact of external transactions results in a debit or credit to an account balance Record transactions using debits and credits Post transactions to T-accounts in the general ledger Prepare a trial balance Functions of Financial Accounting Measure business activities of the company Communicate measurements to external parties for decision making Recall from Chapter 1 that the two functions of financial accounting are to: (1) Measure business activities of the company and (2) Communicate those measurements to external parties for decision-making purposes. 3 Part A Measuring Business Activities 2-4 In this chapter, we focus on the first role—measuring business activities. In chapter 3, we’ll discuss how these measurements are communicated. Most businesses use a computerized accounting system due to the sheer volume of transactions. In this chapter, however, we will see how transactions are recorded in a manual system to better understand the basics. 4 Learning Objective 1 Identify the Basic Steps in Measuring External Transactions. 2-5 External Transactions Transactions conducted with a separate economic entity Internal transaction: events that affect the financial position of the company but do not include an exchange with a separate economic entity The business activities, or transactions, we want to measure and communicate are classified as either external or internal. External transactions are transactions the firm conducts with a separate economic entity. A few examples are selling products to a customer, purchasing supplies from a vendor, and paying salaries to an employee. Internal transactions are events that affect the financial position of the company but do not include an exchange with a separate economic entity. A few examples are using | The Accounting Cycle: During the Period Chapter 2 1 Learning Objectives Identify the basic steps in measuring external transactions Analyze the impact of external transactions on the accounting equation Assess whether the impact of external transactions results in a debit or credit to an account balance Record transactions using debits and credits Post transactions to T-accounts in the general ledger Prepare a trial balance Functions of Financial Accounting Measure business activities of the company Communicate measurements to external parties for decision making Recall from Chapter 1 that the two functions of financial accounting are to: (1) Measure business activities of the company and (2) Communicate those measurements to external parties for decision-making purposes. 3 Part A Measuring Business Activities 2-4 In this chapter, we focus on the first role—measuring business activities. In chapter 3, we’ll discuss how these measurements are communicated. Most businesses use a .