Ch02 - 2 The Recording Process Chapter STUDY OBJECTIVES The...

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48 Chapter 2 The Recording Process After studying this chapter, you should be able to: 1 Explain what an account is and how it helps in the recording process. 2 Define debits and credits and explain their use in recording business transactions. 3 Identify the basic steps in the recording process. 4 Explain what a journal is and how it helps in the recording process. 5 Explain what a ledger is and how it helps in the recording process. 6 Explain what posting is and how it helps in the recording process. 7 Prepare a trial balance and explain its purposes. The Navigator STUDY OBJECTIVES a Feature Story The Navigator a DO IT! DO IT! Scan Study Objectives A Read Feature Story A Read Preview A Read text and answer p. 54 A p. 57 A p. 66 A p. 71 A Work Comprehensive p. 73 A Review Summary of Study Objectives A Answer Self-Study Questions A Complete Assignments A ACCIDENTS HAPPEN How organized are you financially? Take a short quiz. Answer yes or no to each question: • Does your wallet contain so many cash machine receipts that you’ve been declared a walking fire hazard? • Is your wallet such a mess that it is often faster to fish for money in the crack of your car seat than to dig around in your wallet? • Was LeBron James playing high school basketball the last time you bal- anced your checkbook? PDF Watermark Remover DEMO : Purchase from www.PDFWatermarkRemover.com to remove the watermark
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49 The Navigator a Inside Chapter 2… If you think it is hard to keep track of the many transactions that make up your life, imagine what it is like for a major corpo- ration like Fidelity Investments ( www.fidelity.com ). Fidelity is one of the largest mutual fund management firms in the world. If you had your life savings invested at Fidelity Investments, you might be just slightly dis- pleased if, when you called to find out your balance, the rep- resentative said, “You know, I kind of remember someone with a name like yours sending us some money— now what did we do with that?” To ensure the accuracy of your balance and the security of your funds, Fidelity Investments, like all other companies large and small, relies on a sophisticated accounting information system. That’s not to say that Fidelity or any other company is error-free. In fact, if you’ve ever really messed up your checkbook register, you may take some comfort from one accountant’s mistake at Fidelity Investments. The accountant failed to include a minus sign while doing a calculation, making what was actually a $1.3 billion loss look like a $1.3 billion gain! Fortunately, like most accounting errors, it was detected before any real harm was done. No one expects that kind of mistake at a company like Fidelity, which has sophisticated computer systems and top investment managers. In explaining the mistake to shareholders, a spokesperson wrote, “Some people have asked how, in this age of technology, such a mistake could be made. While many of our processes are computerized, accounting systems are complex
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This note was uploaded on 01/30/2011 for the course ACT 240 taught by Professor Janson during the Summer '08 term at N. Michigan.

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Ch02 - 2 The Recording Process Chapter STUDY OBJECTIVES The...

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