Class-Notes-Accounting

Class-Notes-Accounting - Chapter 1 Accounting a financial...

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Chapter 1 Accounting: a financial information system o Identify a transaction (economic event) o Record the data o Communicate what took place (financial reports) Financial Reports o There are both internal and external users Internal: people inside the company (supervisors, managers, directors, etc.) External: people outside of the company (investors, banks) GAAP (Generally Accepted Accounting Principles)—Ethics pg. 8 o Rules that accountants have to follow o Rule 1: Cost Principle Example: Purchase a delivery truck with a sticker price of $65,000 and a market value of $68,000. It was bought for $60,000. When you record this transaction, record the price that you actually pay, not what its worth . Accounting Equation: A=L+E Types of accounts: Assets, Liabilities, Equity, Revenue, Expenses, Dividends o Each one is its own account o A- Assets Something of value or future value that a business owns or has rights to Example: Cash, supplies, equipment, building, land Accounts receivable: people that owe us money (money that we should receive in the future, we have rights to)
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Class-Notes-Accounting - Chapter 1 Accounting a financial...

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