Acct 3110 Chapter 1

Acct 3110 Chapter 1 - Chapter 1 Environment and Theoretical...

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Chapter 1 Environment and Theoretical Structure of Financial Accounting Accounting Defined Process of identifying, recording, and communicating economic events of a business to interested parties. Economic Events An event that can be measured in terms of money. (Changes the accounting equation)
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Assets = Liabilities + Equity Assets = Liabilities + Equity Modern (Cutler) Definition: Modern (Cutler) Definition: Assets + (Liabilities) + (Equity) = 0 Assets + (Liabilities) + (Equity) = 0 Equity = Paid in Capital (PIC) Equity = Paid in Capital (PIC) + + Retained Earnings (RE) Retained Earnings (RE) Retained Earnings (Ending) Retained Earnings (Ending) = Beginning Retained Earnings Beginning Retained Earnings + Net Income Net Income - Dividends Dividends
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Net Income = Revenues Revenues - Expenses Expenses Expanded Definition Assets = Liabilities + PIC + Beg RE + Revenues – Expenses – Dividends OR Assets + (Liabilities) + (PIC) + (Beg RE) + (Revenues) + Expenses + Dividends = 0 Debits
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This note was uploaded on 03/27/2008 for the course ACCT 3110 taught by Professor Cutler during the Spring '08 term at North Texas.

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Acct 3110 Chapter 1 - Chapter 1 Environment and Theoretical...

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