(3) Processing Data Through the Accounting System

(3) Processing Data Through the Accounting System - Chapter...

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Chapter 3 – Processing Data Through the Accounting System T Accounts: left side is the debit side and right side is the credit side (left must equal right) Assets have debit balances while liabilities and shareholder’s equity accounts have credit balances Deceases in assets are entered on the credit side (vice-versa for liabilities and SE) A debit balance in retained earnings account indicates negative retained earnings, which is referred to as a deficit ----------------------------------------------------------------------------------------------------------- - Chart of accounts is the starting point of the accounting cycle Source documents = invoices, cheques, cash register tapes, etc… Journal: Chronological listing of all the events that are recorded in the accounting system (debits are listed first and credits second) Ledger: Collection of all the accounts used by a company Posting: Process of transferring the information from the journal entry to the ledger
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This note was uploaded on 09/12/2011 for the course MGCR 211 taught by Professor La rocca during the Fall '08 term at McGill.

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(3) Processing Data Through the Accounting System - Chapter...

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