ch02 - 2-1 CHAPTER2 The Recording Process 2-2 The Account...

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2-1
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2-2 CHAPTER 2 The Recording Process
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2-3 Record of increases and decreases in a specific asset, liability, equity, revenue, or expense item. Debit = “Left” Credit = “Right” Account Account An Account can An Account can be illustrated in a be illustrated in a T-Account form. T-Account form. SO 1 Explain what an account is and how it helps in the recording process. The Account
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2-4 Double-entry system Each transaction must affect two or more accounts to keep the basic accounting equation in balance. Recording done by debiting at least one account and crediting another. DEBITS must equal CREDITS . SO 2 Define debits and credits and explain their use in recording business transactions. Debit and Credit Procedures The Account
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2-5 Account Name Debit / Dr. Credit / Cr. If Debits are greater than Credits, the account will have a debit balance. $10,000 Transaction #2 $3,000 $15,000 $15,000 8,000 Transaction #3 Balance Transaction #1 Debits and Credits SO 2 Define debits and credits and explain their use in recording business transactions.
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2-6 Account Name Debit / Dr. Credit / Cr. $10,000 Transaction #2 $3,000 Balance Transaction #1 $1,000 $1,000 8,000 Transaction #3 If Debits are less than Credits, the account will have a credit balance. Debits and Credits SO 2 Define debits and credits and explain their use in recording business transactions.
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2-7 Assets - Debits should exceed credits. Liabilities – Credits should exceed debits. Normal balance is on the increase side. Debits and Credits SO 2 Define debits and credits and explain their use in recording business transactions.
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2-8 Owner’s investments and revenues increase owner’s equity (credit).
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