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ch03+Student - Chapter 3 Accounting Information Systems 3 1...

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3-1 Chapter 3: Accounting Information Systems
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3-2 Identifying and recording Journalizing Posting Trial balance Adjusting entries Adjusted trial balance Preparing financial statements Closing Post-closing trial balance Reversing entries Accounting Information System The Accounting Cycle Financial Statements for Merchandisers Basic terminology Debits and credits Accounting equation Financial statements and ownership structure Income statement Statement of retained earnings Balance sheet Closing entries The Accounting Information System
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3-3 u Collects and processes transaction data. u Disseminates the information to interested parties. Accounting Information System Accounting Information System ( AIS )
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3-4 The Accounting Equation Relationship among the assets, liabilities and stockholders’ equity of a business: LO 2 Explain double-entry rules. The equation must be in balance after every transaction. For every Debit there must be a Credit . Illustration 3-3
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3-5 Ownership structure dictates the types of accounts that are part of the equity section. Proprietorship or Partnership Corporation l Capital Account l Drawing Account l Common Stock l Additional Paid-in Capital l Dividends Declared l Retained Earnings Financial Statements and Ownership Structure LO 2 Explain double-entry rules.
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3-6 Financial Statements and Ownership Structure LO 2 Explain double-entry rules. Stockholders’ Equity Balance Sheet Statement of Retained Earnings Net income or Net loss (Revenues less expenses) Income Statement Dividends Retained Earnings (Net income retained in business) Common Stock (Investment by stockholders) Illustration 3-4
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3-7 The Accounting Cycle LO 3 Identify steps in the accounting cycle. Transactions 1. Journalization 6. Financial Statements 7. Closing entries 8. Post-closing trail balance 9. Reversing entries 3. Trial balance 2. Posting 5. Adjusted trial balance 4. Adjustments Work Sheet Illustration 3-6
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3-8 Identify and Recording Transactions What to Record? FASB states, “transactions and other events and circumstances that affect a business enterprise.” LO 3 Identify steps in the accounting cycle. Types of Events: u External – between a business and its environment. u Internal – event occurring entirely within a business.
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3-9 General Journal – a chronological record of transactions. Journal Entries are recorded in the journal. 1. Journalizing LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance. September 1: Stockholders invested $15,000 cash in the corporation in exchange for shares of stock. Illustration 3-7
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3-10 Posting – the process of transferring amounts from the journal to the ledger accounts. 2. Posting LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance.
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