Chapter 3 - CHAPTER 3.THE ACCOUNTING INFORMATION SYSTEM...

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CHAPTER 3…THE ACCOUNTING INFORMATION SYSTEM ACCOUNTING INFORMATION SYSTEM Collects and processes transaction data Disseminates financial information to interested parties In response to Sarbanes-Oxley Act of 2002, focus on AIS to ensure relevant and reliable information reported in financial statements Basic Terminology…Page 68 EVENT…Happening…Source of changes in assets, liabilities, and equity…Events are external or internal ACCOUNT…Companies keep separate account for each asset, liability, revenue, and expense and for equity REAL AND NOMINAL ACCOUNTS…REAL(permanent) accounts are asset, liability and equity accounts…Balance Sheet NOMINAL(temporary) accounts are revenue, expense, and dividend accounts…Income Statement except Dividends Companies close nominal but not real accounts JOURNAL…Book of original entry TRIAL BALANCE…List of all accounts in the ledger & balances
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Chapter 3 - CHAPTER 3.THE ACCOUNTING INFORMATION SYSTEM...

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