Chapter 2_Lecture_Summer_2010

Chapter 2_Lecture_Summer_2010 - Chapter 2-1 1 Explain what...

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Unformatted text preview: Chapter 2-1 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. Chapter 2 Study Objectives Chapter 2 Study Objectives Chapter 2-2 The Account The Account Debits and Debits and credits credits Debit and Debit and credit credit procedure procedure Stockholders’ Stockholders’ equity equity relationships relationships Expansion of Expansion of basic equation basic equation Steps in the Steps in the Recording Recording Process Process The Recording The Recording Process Process Illustrated Illustrated The Trial The Trial Balance Balance Limitations of a Limitations of a trial balance trial balance Locating errors Locating errors Use of dollar Use of dollar signs signs Summary Summary illustration of illustration of journalizing journalizing and posting and posting The Recording Process The Recording Process Journal Journal Ledger Ledger Chapter 2-3 A c c o u n t N a m e D e b it / D r. C re d it / C r. An individual accounting record used to record activity (increases and decreases) in a specific asset, liability, equity, revenue, or expense item. Debit = “Left” Credit = “Right” Account Account An Account can An Account can be illustrated in a be illustrated in a T-Account form. T-Account form. The Account The Account Chapter 2-4 Double-entry Double-entry accounting system Each transaction must affect two or more accounts to keep the basic accounting equation in balance. Recording done by debiting at least one account and crediting another. DEBITS must equal must equal CREDITS when recording each single transaction. Debits and Credits Debits and Credits Chapter 2-5 The terms debit debit means left and the term credit credit means right. The act of entering an amount on the left left side of an account is called debiting debiting the account and making an entry on the right right side is crediting crediting the account. When the debit amounts exceed the credits, an account has a When the debit amounts exceed the credits, an account has a debit debit balance; when the reverse is true, the account has a balance; when the reverse is true, the account has a credit credit balance. balance. Debits and Credits Debits and Credits Chapter 2-6 Normal balance Normal balance is the side where an is the side where an increase increase in the in the account is recorded....
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This note was uploaded on 02/18/2011 for the course ACCT 101 taught by Professor Diaz during the Fall '08 term at Rutgers.

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Chapter 2_Lecture_Summer_2010 - Chapter 2-1 1 Explain what...

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