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Chapter Two

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6 views

Chapter Two

Uploaded by

a7medassem12000
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Analyzing, Recording

Transactions and
Preparing Trial Balance
 They identify and describe transactions
and events entering the accounting
process. They are the sources of
accounting information and can be in
either hard copy or electronic form.
 Examples are sales tickets, checks,
purchase orders, bills from suppliers,
employee earnings records, and bank
statements.
 An account is a record of increases and
decreases in a specific asset, liability,
equity, revenue, or expense item.
Information from an account is
analyzed, summarized, and presented
in reports and financial statements.

 Thegeneral ledger, or simply ledger, is a


record containing all accounts used by a
company.
 Assets are resources owned or controlled
by a company, and those resources have
expected future benefits.
 Liabilities are claims (by creditors) against
assets, which means they are obligations to
transfer assets or provide products or
services to others.
 Equity Accounts are the owner’s claim on
a company’s assets is called equity or
owner’s equity. Equity is the owner’s
residual interest in the assets of a business
after deducting liabilities.
1. Identify the transaction and any
source documents.
2. Analyze the transaction using the
accounting equation.
3. Record the transaction in journal
entry form applying double-entry
accounting.
4. Post the entry (we use T-accounts to
represent ledger accounts).
1. Income Statement reports the revenues
earned less the expenses incurred by a business
over a period of time
2. Statement of Owner’s Equity reports
information about how equity changes over the
reporting period.
3. Balance Sheet reports the financial position of
a company at a point in time, usually at the
end of a month, quarter, or year.
4. Cash Flow Statement

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