Kieso_Inter_13e_Ch03

Kieso_Inter_13e_Ch03 - Chapter 3-1 C H A P T E R C H A P T...

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Unformatted text preview: Chapter 3-1 C H A P T E R C H A P T E R 3 3 THE ACCOUNTING INFORMATION THE ACCOUNTING INFORMATION SYSTEM SYSTEM Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield Chapter 3-2 Collects and processes transaction data. Disseminates the information to interested parties. Accounting Information System Accounting Information System Accounting Information System ( AIS ) Chapter 3-3 How much and what kind of debt is outstanding? Were sales higher this period than last? What assets do we have? What were our cash inflows and outflows? Did we make a profit last period? Are any of our product lines or divisions operating at a loss? Can we safely increase our dividends to stockholders? Is our rate of return on net assets increasing? Accounting Information System Accounting Information System Helps management answer such questions as: Chapter 3-4 Basic Terminology Basic Terminology Event Event Transaction Transaction Account Account Real Account Real Account Nominal Account Nominal Account Ledger Ledger Journal Journal Posting Posting Trial Balance Trial Balance Adjusting Entries Adjusting Entries Financial Statements Financial Statements Closing Entries Closing Entries Chapter 3-5 Debits and Credits Debits and Credits An Account Account shows the effect of transactions on a given asset, liability, equity, revenue, or expense account. Double-entry Double-entry accounting system (two-sided effect). Recording done by debiting at least one account and crediting another. DEBITS must equal must equal CREDITS . Chapter 3-6 Account Name Debit / Dr. Credit / Cr. Debits and Credits Debits and Credits An arrangement that shows the effect of transactions on an account. 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. Chapter 3-7 Account Name Debit / Dr. Credit / Cr. Debits and Credits Debits and Credits If Debit entries are greater than greater than Credit entries, the account will have a debit balance. $10,000 Transaction #2 $3,000 $15,000 $15,000 8,000 Transaction #3 Balance Transaction #1 Chapter 3-8 Account Name Debit / Dr. Credit / Cr. Debits and Credits Debits and Credits If Credit entries are greater than greater than Debit entries, the account will have a credit balance. $10,000 Transaction #2 $3,000 $1,000 $1,000 8,000 Transaction #3 Balance Transaction #1 Chapter 3-9 Chapter 3-23 Asset s Asset s Debit / Dr. Credit / Cr. Normal Balance Normal Balance Chapter 3-27 Debit / Dr. Credit / Cr. Normal Balance Normal Balance Expense Expense Chapter 3-24 Liabilit ies Liabilit ies Debit / Dr. Credit / Cr. Normal Balance Normal Balance Chapter 3-25 Debit / Dr. Credit / Cr....
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This note was uploaded on 03/08/2011 for the course ACCT 3220 taught by Professor Hollie,dana during the Summer '08 term at Colorado.

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Kieso_Inter_13e_Ch03 - Chapter 3-1 C H A P T E R C H A P T...

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