Cpt 3 Ppts-9 - Chapter 3 Processing Accounting Information External and Internal Events Event a happening of consequence to an entity External event

Cpt 3 Ppts-9 - Chapter 3 Processing Accounting Information...

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Chapter 3 Processing Accounting Information
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External and Internal Events Event : a happening of consequence to an entity External event : interaction between an entity and its environment Internal event : occurs entirely within an entity Transaction : any event, external or internal, that is recognized in a set of financial statements LO 1
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Role of Source Documents in an Accounting System Source document : used as evidence to record a transaction Different Forms : Purchase Invoice Sales Invoice Cash register tape Time cards LO 2
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Analyze the Effects of Transactions on the Accounting Equation Accounting equation: Assets =Liabilities + Stockholders’ Equity
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Issuance of Capital Stock Glengarry Health Club is started when Karen Bradley and Kathy Drake file articles of incorporation with the state to obtain a charter. Each invests $50,000 in the business. In return, each receives 5,000 shares of capital stock
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Acquisition of Property in Exchange for a Note Company buys a piece of property for $200,000. The seller agrees to accept a five-year promissory note. The property consists of land valued at $50,000 and a newly constructed building valued at $150,000
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Acquisition of Equipment on an Open Account Karen and Kathy contact an equipment supplier and buy $20,000 of exercise equipment: treadmills, barbells, and stationary bicycles. The supplier agrees to accept payment in full in 30 days
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