Ch3 The Accounting Information System

Ch3 The Accounting Information System - Ch3 the Accounting...

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Ch3 the Accounting Information System Study Objectives 1. Analyze the effect of business transactions on the basic accounting equation. 2. Explain what an account is and how it helps in the recording process. 3. Define debits and credits and explain how they are used to record business transactions. 4. Identify the basic steps in the recording process. 5. Explain what a journal is and how it helps in the recording process. 6. Explain what a ledger is and how it helps in the recording process. 7. Explain what posting is and how it helps in the recording process. 8. Explain the purposes of a trial balance. 9. Classify cash activities as operating, investing, or financing. The Accounting Information System The system of collecting and processing transaction data and communicating financial information to decision makers is known as the accounting information system. Accounting Transactions Transactions are economic events that require recording in the financial statements. May be external or internal. Not all activities represent transactions. Each transaction has a dual effect on the accounting equation. Question: Are the following events recorded in the accounting records?
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Transaction Analysis The process of identifying the specific effects of economic events on the accounting equation 1. On October 1, cash of $10,000 is invested in Sierra Corporation by investors in exchange for $10,000 of common stock. 2.
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Ch3 The Accounting Information System - Ch3 the Accounting...

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