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Unformatted text preview: chapter 2 Analyzing Transactions ______________________________________________ OPENING COMMENTS Chapter 2 is the most important chapter in the text. It introduces students to the rules of debit and credit, chart of accounts, two-column journals, four-column ledgers, T accounts, and the trial balance. Quite frankly, if students fail to grasp the concepts in this chapter, the first seeds of destruction will be sown for those students who will ultimately withdraw from or fail the course. Emphasize that Chapter 2 builds the foundation for all that will be learned about accounting principles. Unlike many other college courses, it is impossible to understand Chapter 3 and beyond if the principles of Chapter 2 are not mastered. You need to dispel the false belief that “maybe I’ll get the next chapter— even though I’m totally lost now.” Also encourage your students to seek help immediately if they begin to struggle with course content. Make them aware of the resources available at your institution: tutorial services, peer assistance, your office hours, use of CengageNOW, and support services, etc. Too frequently, students wait until after they have failed their first examination to seek help. For those who heed them, these simple suggestions will help students avoid failure. After studying the chapter, your students should be able to: 1. Describe the characteristics of an account and a chart of accounts. 2. Describe and illustrate journalizing transactions using the double-entry accounting system. 3. Describe and illustrate the journalizing and posting of transactions to accounts. 4. Prepare an unadjusted trial balance and explain how it can be used to discover errors. 17 This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher. 18 Chapter 2 Analyzing Transactions This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher. STUDENT FAQS • Why does Cash have a debit balance instead of a credit? My bank tells me they are crediting my account when I put money in. This question has to be answered several times until the student realizes that to the bank it is a liability and they are telling the student what they are doing to their books. • Why is the abbreviation for a debit “Dr” when there is no “r” in the spelling? • Why can’t the normal balances of all the accounts be opposite what they are? • Who dreamed this accounting system up? • Who uses these statements, and what do they do with the information?...
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- Spring '10