Presentation 2 - Analyzing Transaction Click to edit Master...

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Click to edit Master subtitle style 10/23/10 Analyzing Transaction
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10/23/10 Double-entry This equation must remain in balance and for that reason accounting system is called a double-entry system. This means that every transaction that is recorded in accounting records must have at least two entries; if it only has one entry the equation would necessarily be unbalanced.
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10/23/10 Debit and Credits In bookkeeping, instead of using addition '+' and subtraction '-' symbols, a transaction uses the symbol DR (Debit) or CR (Credit). The rules of transaction analysis: Asset and Expense accounts are increased by a debit and decreased by a credit. Liabilities, Equity, and Revenue accounts are increased by a credit and decreased by a debit.
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10/23/10 T account
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10/23/10 Chart of Accounts Balance Sheet Accounts Income Statement Accounts 1 Assets 4 Revenue 11 Cash 41 Fees Earned 12 Accounts Receivable 5 Expense 13 Supplies 51 Wages Expense 14 Prepaid Insurance 52 Rent Expense 15 Land 53 Utilities Expense 16 Office Equipment
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