Lecture 5 - Accounting

Lecture 5- - AccountingBasics AccountinginSAP COControlling 2 GeneralLedger ChartofAccounts BalanceSheet Assets Equity Liabilities IncomeStatement

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Accounting Basics Accounting in SAP FI – Financial Accounting CO - Controlling 2
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4 4 General Ledger Chart of Accounts Balance Sheet Assets Liabilities Equity Income Statement Revenues Expenses
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5 4 The  General Ledger  provides a complete record of all " acceptable "   business transactions from the viewpoint of an accountant An acceptable business transaction has the following traits Affects the financial position of the entity Measurable in a currency Affects at least two accounts Assets = Liabilities + Equity  (Accounting Equation) Debits = Credits Cannot have a single sided entry:  Debits have to equal credits The system will not allow a posting that is out of balance: If it is you  must first correct the error, or  park  it until a later time when you can  fix it. You can have multiple debits or credits per side (splits) , but the total  has to balance per transactions
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6 4 A T-Account is a template or format shaped  like a “T” that represents a particular general  ledger account.  Debit entries are recorded  on the left side of the “T” and credit entries  are recorded on the right side of the “T”. 
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7 4 Things of value that a company  owns  or  controls that accountants have agreed to  measure in monetary terms. Examples of these accounts include: Cash Accounts receivables Plant and equipment  Inventory
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8 4 Things that a company  owes  or must  provide services in order to settle that  accountants have agreed to measure in  monetary terms. Examples of these accounts include: Accounts payable Notes payable Bonds payable Unearned revenue
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9 4 Equity is simply the mathematical  difference between assets and liabilities. Have = Owe + Own Includes the monetary amounts collected  with respect to all preferred and common  stock transactions, the aggregate net  income reported since organization of the  company, and a reduction for dividends  that have been paid to stockholders.
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10 Balance Sheet
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11 4 The monetary amounts collected from  customers in settlement for goods  purchased from our company or services  rendered by our firm to them during the  current fiscal year.
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12 The monetary amounts paid to vendors in  settlement for goods purchased by our  company or services rendered to our firm  by other companies during the current  fiscal year.  Net Income = Revenues - Expenses
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13 Income Statement
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14 Assets =  Liabilities + Owner’s Equity + Revenues – Expenses Or Assets  = Liabilities  + Expenses  + Owner's Equity + Revenues (debit accounts) (credit accounts) This equation must remain in balance. We use the  double entry  accounting system to do so. One account is debited and  another account is credited so that total debits equals total  credits.
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This note was uploaded on 03/14/2010 for the course ITP 320 taught by Professor Kale during the Fall '08 term at USC.

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Lecture 5- - AccountingBasics AccountinginSAP COControlling 2 GeneralLedger ChartofAccounts BalanceSheet Assets Equity Liabilities IncomeStatement

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