Accounting Chapter 2 Notes

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Unformatted text preview: decreased using the rules of debit and credit for the six main account types. We then record the transaction in the journal, listing the debit first. Debits must equal credits. We then post all transactions to the ledger (T- Account) Source Documents- The Original of the Steps - Bank Deposit Ticket: Document that shows the amount of cash received by the business, and the stock certificate issued by the company shows the number of stock issued - Purchas Invoice: source document that tells the business how much and when to pay the vendor - Bank Check: the check and the purchase invoice give the business the information it needs to record the cash payment accurately - Sales Invoice: Source document that tells the business to how much revenue to record Journalizing Transactions and Posting To the Ledger - Compound Journal Entry: A compound journal entry has more than two accounts, but total debits still must equal total credits EX: Recording Cash Expenses on Computer, Rent, Salary, and Utility - A transaction occurs. We then identify the account names affected by the transaction and determine whether the accounts increased or decreased using the rules of debit and credit for the six main account types. We then record in the journal, listing the debits first. Debit must equal credits. We then post all transaction to the T- Account (ledger). Finally, we determine the ending balance in each T- Account,...
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