Chp 1-4 review

Chp 1-4 review - FINANCIAL STATEMENTS The main points of...

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Chapter 1 ACCOUNTING IN BUSINESS The main points of the chapter are : 1. Accounting Equation and Transaction Analysis Assets = Liabilities + Owners’ Equity. Change in Owner’s Equity= 2. Financial Statements Balance Sheet Income Statement Statement of Owner’s Equity Statement of Cash Flow 3. Principles and Assumptions of Accounting Four principles Four assumptions 1-1
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Chapter 2 ANALYZING AND RECORDING TRANSACTIONS The main point of the chapter is : Double-Entry Accounting and the Debit/Credit Convention Assets = Liabilities + Owners’ Equity Debit Credit Debit Credit Debit Credit + - - + - + Normal Normal Normal Balance Balance Balance 2
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Owners’ Equity Debit Credit - + Normal Balance Expenses Withdrawals Revenues Debit Credit Debit Credit Debit Credit + - + - - + Using the T-Account to Analyze Transactions The fundamental equation for a firm's accounts is: Beginning Balance + Increases - Decreases = Ending Balance 1-3
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Chapter 3 ADJUSTING ACCOUNTS AND PREPARING
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Unformatted text preview: FINANCIAL STATEMENTS The main points of the chapter are : 1. the accrual versus cash bases of accounting 2. Adjusting Entries Adjusting entries record revenues and expenses before or after the cash is received or paid. There are two broad types of adjusting entries: Deferral type adjusting entries: bring past transactions up to date. A. Adjusting Prepaid (Deferred) Expenses B.Adjusting Unearned (Deferred) Revenues Accrual adjusting entries record amounts that have accumulated. C. Adjusting Accrued Expenses D. Adjusting Accrued Revenues 3. Prepare financial statements 4 Chapter 4 COMPLETING THE ACCOUNTING CYCLE The main points of the chapter are : 1. Temporary vs. Permanent Account 2. Recording Closing Entries the purpose is to transfer the end-of-period balances in revenues, expense, and withdrawals accounts to the permanent capital account. 1-5...
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