lecture3 - ACCT 3220/Aug 27, 2010 Transactions Financial...

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ACCT 3220/Aug 27, 2010 1 Transactions Financial Statements Journal entries Active entries to record active transactions Time passage entries to record balance adjustments Accounting Flow or Accounting Cycle Transaction Journal Entry Time Passage adjustment Financial Statements Quickly and concisely describe a transaction and update account balances (Debit) Interest Expense $125 (Debit) Loans Payable $4,075 (Credit) Cash $4,200 What happened here? Journal Entries
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ACCT 3220/Aug 27, 2010 2 Journal Entries: Debits and Credits Increase or decrease to an account, depending on account type Debits increase Assets, decrease Liabilities and Owners’ Equity Credits decrease Assets, increase Liabilities and Owners’ Equity Debits increase Expenses or Losses Credits increase Revenues or Gains For any transaction, Total Debits must = Total Credits + - Asset (Debit) (Credit) Liability or Owners’ Equity (Debit) (Credit) + - Retained Earnings Expenses/Losses (Debit) Revenues/Gains (Credit) + + Journal Entries: Debits and Credits
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ACCT 3220/Aug 27, 2010 3 “Debit” card Using a debit card reduces your assets. (Doesn’t make sense!) Using a debit card reduces the bank’s liability to you. “Credit” card
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This note was uploaded on 10/12/2010 for the course ACCT 3220 taught by Professor Hollie,dana during the Fall '08 term at Colorado.

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lecture3 - ACCT 3220/Aug 27, 2010 Transactions Financial...

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