Module_2 - Chapter 2 Analyzing Transactions Usefulness of...

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Chapter 2: Analyzing Transactions Usefulness of an Account Account – shows the increases and decreases of a financial statement item Ledger – a group of accounts for a business entity Chart of accounts – list of the accounts in the ledger o Listed in order of assets, liabilities, stockholder’s equity, revenue and expenses o Can change at any time American Company Chart of Accounts Assets Cash Accounts receivable Prepaid insurance Supplies Equipment Liabilities Accounts payable Notes payable Stockholder’s equity Capital stock Retained earnings Dividends Revenue Fees Earned Expenses Rent expense Salaries expense Characteristics of an Account 1. Each account has a title which is the name of the item recorded in the account 2. Each account has a space for recording increases in the amount of the item 3. Each account has a space for recording decreases in the amount of the item Prepared by: Maria Mari Fall, 2008 Page 1 of 5 1
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Chapter 2: Analyzing Transactions T Account
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Module_2 - Chapter 2 Analyzing Transactions Usefulness of...

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