ch03 - 3-1Intermediate Accounting14th Edition3The...

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Unformatted text preview: 3-1Intermediate Accounting14th Edition3The Accounting Information SystemKieso, Weygandt, and Warfield3-21.Understand basic accounting terminology.2.Explain double-entry rules.3.Identify steps in the accounting cycle.4.Record transactions in journals, post to ledger accounts, and prepare a trial balance.5.Explain the reasons for preparing adjusting entries.6.Prepare financial statement from the adjusted trial balance.7.Prepare closing entries.Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives3-3Collects and processes transaction data.Disseminates the information to interested parties.Accounting Information SystemAccounting Information SystemAccounting Information SystemAccounting Information SystemAccounting Information System(AIS)3-4How 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 SystemAccounting Information SystemAccounting Information SystemAccounting Information SystemHelps management answer such questions as:3-5Accounting Information SystemAccounting Information SystemAccounting Information SystemAccounting Information SystemLO 2 Explain double-entry rules.An Accountshows the effect of transactions on a given asset, liability, equity, revenue, or expense account.Double-entry accounting system (two-sided effect).Recording done by debiting at least one account and crediting another.DEBITSmust equal CREDITS.Debits and Credits3-6Account NameDebit / Dr. Credit / Cr. Debits and CreditsDebits and CreditsDebits and CreditsDebits and CreditsAn arrangement that shows the effect of transactions on an account.Debit = “Left”Credit = “Right”AccountAccountLO 2 Explain double-entry rules.An Account can An Account can be illustrated in a be illustrated in a T-Account form.T-Account form.3-7Chapter 3-23AssetsAssetsDebit / Dr. Credit / Cr. Normal BalanceNormal BalanceChapter 3-27Debit / Dr. Credit / Cr. Normal BalanceNormal BalanceExpenseExpenseChapter 3-24LiabilitiesLiabilitiesDebit / Dr. Credit / Cr. Normal BalanceNormal BalanceChapter 3-25Debit / Dr. Credit / Cr. Normal BalanceNormal BalanceEquityEquityChapter 3-26Debit / Dr. Credit / Cr. Normal BalanceNormal BalanceRevenueRevenueNormal Balance CreditNormal Balance CreditNormal Balance DebitNormal Balance DebitDebits and Credits SummaryDebits and Credits SummaryDebits and Credits SummaryDebits and Credits SummaryLO 2 Explain double-entry rules.3-8The Accounting EquationThe Accounting EquationThe Accounting EquationThe Accounting EquationLO 2 Explain double-entry rules....
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This note was uploaded on 11/07/2011 for the course ACC 300 taught by Professor Lori during the Fall '10 term at Michigan State University.

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ch03 - 3-1Intermediate Accounting14th Edition3The...

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