Week 1 Chapter 2 - 46 Chapter 2 The Recording Process Scan...

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Unformatted text preview: 46 Chapter 2 The Recording Process Scan Study Objectives Read Feature Story Read Preview Read text and answer Before You Go On p. 53 p. 56 p. 66 p. 70 Work Demonstration Problem Review Summary of Study Objectives Answer Self-Study Questions Complete Assignments 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 S T U D Y O B J E C T I V E S Feature Story 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 youve 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 balanced your checkbook? The Navigator 47 The Navigator Inside Chapter 2 New Xbox Contributes to Profitability (p. 56) What Would Sam Do? (p. 58) Sarbanes-Oxley Comes to the Rescue (p. 70) All About You : Your Personal Annual Report (p. 71) 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 moneynow 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. Thats not to say that Fidelity or any other company is error-free. In fact, if youve ever really messed up your checkbook register, you may take some comfort from one accountants 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....
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Week 1 Chapter 2 - 46 Chapter 2 The Recording Process Scan...

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