ACT 201 CHAP 2.ppt - THE RECORDING PROCESS CHAPTER 2 ACT 201 2-1 Learning Objectives After studying this chapter you should be able to[1 Explain what an

ACT 201 CHAP 2.ppt - THE RECORDING PROCESS CHAPTER 2 ACT...

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2-1 THE RECORDING PROCESS THE RECORDING PROCESS CHAPTER 2 CHAPTER 2 ACT 201 ACT 201
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2-2 Learning Objectives After studying this chapter, you should be able to: [1] Explain what an account is and how it helps in the recording process. [2] Define debits and credits and explain their use in recording business transactions. [3] Identify the basic steps in the recording process. [4] Explain what a journal is and how it helps in the recording process. [5] Explain what a ledger is and how it helps in the recording process. [6] Explain what posting is and how it helps in the recording process. [7] Prepare a trial balance and explain its purposes.
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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 be illustrated in a T- account form. The Account
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2-4 An owner makes an initial investment of An owner makes an initial investment of $15000 to start a business $15000 to start a business Monthly rent of $7000 is paid. Monthly rent of $7000 is paid. cash 15000 Cash 7000 Cash 15000 7000 8000
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2-5 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 . Debits and Credits The Account
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2-6 Account Name Debit / Dr. Credit / Cr. If Debit amounts are greater than Credit amounts, the account will have a debit balance. $10,000 Transaction #2 $3,000 $15,000 8,000 Transaction #3 Balance Transaction #1 Debits and Credits
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2-7 Account Name Debit / Dr. Credit / Cr. $10,000 Transaction #2 $3,000 Balance Transaction #1 $1,000 8,000 Transaction #3 If Debit amounts are less than Credit amounts, the account will have a credit balance.
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