2.18 - Today's Topic Financial Accounting Information System This class will describe the Financial Accounting Cycle and Describe GAAP for Balance

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Today’s Topic PLEASE TURN OFF CELL PHONES Financial Accounting Information System This class will describe the Financial Accounting Cycle and Describe GAAP for: Balance Sheet: Notes Receivable (CD), Interest Receivable  Income Statement: Interest Revenue Statement of Cash Flow effect
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Fig 101 FINANCIAL ACCOUNTING CYCLE (I) Routine Transactions Daily/regular transactions (often performed electronically) Uses all accounts (temporary and permanent) Needs periodic transactions before preparing financial statements Transaction Journal General Ledger
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Fig 102 FINANCIAL ACCOUNTING CYCLE (II) Periodic Transactions Recorded whenever financial statements are desired Uses all accounts (temporary and permanent) General ledger contains the ending balances for this period Adjusting General Trial Financial Entry Ledger Balance Statements
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Fig 103 FINANCIAL ACCOUNTING CYCLE (III) ___Closing____ Recorded after financial statements are prepared Closing entry uses temporary accounts and one permanent account General ledger contains only permanent accounts General ledger contains the beginning balances for the next period (permanent account) Closing Entry General Ledger
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Fig 104 Adjusting Entries Update account  balances              to preparing  financial statements Usually for Revenue or Expense that is recognized due to the passage of time
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Fig 105 Steps in an Accounting Cycle Record  Transactions Adjust  Accounts Prepare  Statements Close   Temporary  Accounts
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Fig 106 Investments That Pay Interest Loans given to others: Notes Receivable Investments bearing interest: Certificates of Deposit Interest is earned over time Revenue Recognition Cash is received on another schedule Adjustment is needed when Financial Statements are prepared
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Fig 107 NOTES RECEIVABLE / CERTIFICATE OF DEPOSIT Recognition When note is signed or cash is given Valuation (Measurement) Amount owed to business Presentation Listed after accounts receivable in Current Asset section of the Balance Sheet if due in one year Listed first in the Long-Term Asset section of the Balance Sheet if long-term
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Since you are familiar with these types of events, let’s look  at the summary of the general ledger accounts for Conner  Consultants. Second Accounting Cycle
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This note was uploaded on 03/31/2008 for the course ACIS 2115 taught by Professor Jayardley during the Spring '07 term at Virginia Tech.

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2.18 - Today's Topic Financial Accounting Information System This class will describe the Financial Accounting Cycle and Describe GAAP for Balance

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