UCB+UGBA102A+Topic02+Slides - Accounting System:...

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Accounting System: Transaction Analysis UGBA102A Introduction to Financial Accounting
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UGBA102A Dennis Geyer 2 Transaction Analysis Data Entry Accounting Database Financial Reports Financial Analysis Accounting Logic Accounting Documents The Accounting System
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UGBA102A Dennis Geyer 3 The Accounting System Transaction analysis involves deciding what to record and how much Data entry involves how to record a particular transaction including the appropriate coding Programming logic is known as the “double entry” system Structured database is organized by date, by account, and by report center code Technical documents include journals, ledgers, and trial balances Financial reports include the balance sheet and the income statement Financial analysis involves evaluating what the financial reports mean
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UGBA102A Dennis Geyer 4 Accounting Measurement Recognition refers to when the transaction is recorded. Purchase laptop on credit. When to record? Valuation refers to the monetary value used to record the transaction. Use historical cost, resale value, expected economic value, or fair value? Classification refers to how the transaction should be categorized. Classify as asset or expense?
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UGBA102A Dennis Geyer 5 Transactions & Accounts Transaction represents an economic event that has a measurable effect on the financial condition of an enterprise. Account represents a device that is used to classify and summarize measurements of economic activity.
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UGBA102A Dennis Geyer 6 Chart of Accounts The Chart of Accounts is a master document maintained by the accounting department that lists all the approved accounts and how they are used. Permanent accounts whose balances are carried forward from one period to the next. Temporary accounts whose balances are only maintained for a year, at the end of which they are “closed”.
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UGBA102A Dennis Geyer 7 The Accounting Equation Assets = Claims Assets = Liabilities + Owners’ Equity
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UGBA102A Dennis Geyer 8 One Step Further Assets = Liabilities + Owners’ Equity Revenues - Expenses Increases Decreases
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UGBA102A Dennis Geyer 9 Example On January 1, you invested $5,000 from your personal checking account which you deposited into a business account.
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This note was uploaded on 09/20/2009 for the course UGBA 102A taught by Professor Udpa during the Summer '07 term at University of California, Berkeley.

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UCB+UGBA102A+Topic02+Slides - Accounting System:...

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