NBJ11e_IM_ch03 - 3 REVIEW OF A COMPANYS ACCOUNTING SYSTEM...

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3-1 3REVIEW OF A COMPANY’S ACCOUNTING SYSTEM CHAPTER OBJECTIVESAfter careful study of this chapter, students will be able to: 1. Understand the components of an accounting system. 2. Know the major steps in the accounting cycle. 3. Prepare journal entries in the general journal. 4. Post to the general ledger and prepare a trial balance. 5. Prepare adjusting entries. 6. Prepare the financial statements. 7. Prepare closing entries. 8. Complete a worksheet (spreadsheet). 9. Use subsidiary ledgers. 10. Understand special journals. 11. Convert cash-basis financial statements to accrual-basis (Appendix).
3-2 SYNOPSISThe Accounting System
3. The equation may be expanded to include other components:
4. In financial accounting, a transactioninvolves the transfer of something of value between the company and another party. An eventis a “happening” that affects the company. An event may be (a) internal

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