1 Chapter 4 - Ledger Notes. 2 Record increases and decreases in a specific asset, liability, equity, revenue, or expense item. Debit = “Left” Credit =

Slides:

Advertisements

Similar presentations

Accounting Principles, Eighth Edition

Advertisements

Analyzing and Recording Transactions Last Revised: 3/1/2011

Accounting for Transactions and the Financial Statements

Financial and Managerial Accounting Wild, Shaw, and Chiappetta Fifth Edition Wild, Shaw, and Chiappetta Fifth Edition McGraw-Hill/Irwin Copyright © 2013.

Dr. Mohamed A. Hamada Lecturer of Accounting Information Systems

Slide 1-1 Chapter 2 Principles of Accounting Analyzing Business Transactions.

THE ACCOUNT An account is an individual accounting record of increases and decreases in a specific asset, liability, or owner’s equity item. A company.

Cash, Short-term Investments and Accounts Receivable

Financial Accounting, IFRS Edition

Dr. Mohamed A. Hamada Lecturer of Accounting Information Systems

BUS 2101 Decision Making Financial Information Financial Statement Analysis Financial Statements GAAP Income Statement Statement of Cash Flow Balance Sheet.

Accounting 211 – Chapter 2 The Recording Process

Financial Accounting, Sixth Edition

2 Analyzing Transactions Accounting 26e C H A P T E R Warren Reeve

© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Chapter 2 Analyzing and Recording Business Transactions.

Chapter 2: The Recording Process

Chapter 3-1 The Accounting Information System Information System Accounting, Third Edition.

Accounting Principles, Ninth Edition

Accounting Principles, Ninth Edition

Accounting Principles, Ninth Edition

Unit-2 Accounting System Prepared by Dr. Siraj Ahmad College of Business Administration, Al-Kharj AL-Kharj University Kingdom of Saudi Arabia.

Recording Business Transactions Chapter 2 2-1Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.

Analyzing and Recording Transactions Pr. SAMLAL Zoubida.

Accounting Principles, Eighth Edition

Chapter 2 Recording Business Transactions

Financial Accounting, IFRS Edition

Chapter 2-1 Financial Accounting & Information System (2) Session Objectives: Last Session Recap Last Session Recap Debits and Credits in Accounting Debits.

Keyterms Journal Entries Closing Entries Normal Balance Accounting Cycle

3-1 THE ACCOUNTING INFORMATION SYSTEM Accounting, Fifth Edition 3 Fall 2015.

Recording Business Transactions Chapter 2 2-1Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.

THE ACCOUNTS “3 types” ASSETS= LIABILITIES + OWNERS EQUITY Revenue - Expenses = (net income) Drawings / dividend (-) Investments (+)  A company will have.

Balance Sheet, T-Accounts and the Simple Ledger  THE RECORDING PROCESS Unit 2.

THE ACCOUNTS “3 types”  A company will have separate accounts for each item (ex: cash, salaries expense, accounts payable)  an individual accounting.

Chapter 2-1 CHAPTER 2 THE RECORDING PROCESS Accounting Principles, Eighth Edition.

Analyzing Transactions CPA, MBA By Rachelle Agatha, CPA, MBA Slides by Rachelle Agatha, CPA, with excerpts from Warren, Reeve, Duchac.

CH (2). Record of increases and decreases in a specific asset, liability, equity, revenue, or expense item. Debit = “Left” Credit = “Right” Account An.

Debit & Credit Left side & Right side Accounting equation. Accounts accumulate the results of transactions. Debit are always entered on the left side.

Financial and Managerial Accounting Wild, Shaw, and Chiappetta Fourth Edition Wild, Shaw, and Chiappetta Fourth Edition McGraw-Hill/Irwin Copyright © 2011.

Financial Accounting Fundamentals John J. Wild Fourth Edition John J. Wild Fourth Edition McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies,

ADJUSTED TRIAL BALANCE

3–13–1 1-1 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

3 The Accounting Information System Kimmel ● Weygandt ● Kieso

Chapter 2-1. Chapter 2-2 CHAPTER 2 THE RECORDING PROCESS Accounting Principles, Eighth Edition.

Financial Accounting John J. Wild Seventh Edition John J. Wild Seventh Edition Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction.

Double entry bookkeeping

2-1 THE RECORDING PROCESS CHAPTER 2 ACT 201 SECTION:8,9& 1.

CH-2: The Recording Process The Account Steps in the recording process The Trial Balance.

Preview of Chapter 2.

Chapter 3-1. Chapter 3-2 The Accounting Information System Information System Financial Accounting, Fifth Edition.

2-1 2 Learning Objectives After studying this chapter, you should be able to: [1] Explain what an account is and how it helps in the recording process.

Chapter 2-1. Chapter 2-2 Chapter 2 The Recording Process Accounting Principles, Ninth Edition.

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 3 Applying Double-Entry Accounting.

Financial Accounting, IFRS Edition

CHAPTER2 The Recording Process. CHAPTER2 The Recording Process.

ACCT 201 FINANCIAL REPORTING Chapter 2

Accounting Principles, Eighth Edition

University of California, Santa Barbara

Accounting Principles, Ninth Edition

University of California, Santa Barbara

Lecture on the Recording Process

Chapter 2: The Recording Process

THE RECORDING PROCESS -POSTING

Certified General Accountants

Debit Credit Review Questions

Debit & Credit Left side & Right side.

Financial Accounting, IFRS Edition

Analyzing Transactions

Financial Accounting, Sixth Edition

Presentation transcript:

1 Chapter 4 - Ledger Notes

2 Record increases and decreases in a specific asset, liability, equity, revenue, or expense item. Debit = “Left” Credit = “Right” Account An Account can be illustrated in a T-Account form. The Account

3 Double-entry Double-entry accounting system Each transaction must affect two or more accounts to keep the basic accounting equation in balance. (Assets = Liabilities + O.E.) Recording is done by debiting at least one account and crediting another. must equal DEBITS must equal CREDITS. Debits and Credits

4 greater than If Debits are greater than Credits, the account will have a debit balance. $10,000Transaction #2$3,000 $15,000 8,000Transaction #3 Balance Transaction #1 Debits and Credits

5 greater than If Credits are greater than Debits, the account will have a credit balance. $10,000Transaction #2$3,000 Balance Transaction #1 Debits and Credits $1,000 8,000Transaction #3

6 Normal Balance Credit Normal Balance Debit Debits and Credits Summary

7 Balance Sheet Income Statement Balance Sheet Income Statement = + = - AssetLiabilityEquityRevenueExpense Debit Credit Debits and Credits Summary

8 Debits: a. increase both assets and liabilities. b. decrease both assets and liabilities. c. increase assets and decrease liabilities. d. decrease assets and increase liabilities. Review Question Debits and Credits Summary

9 Discussion Question Q4. Maria Alvarez, a beginning accounting student, believes debit balances are favorable and credit balances are unfavorable. Is Maria correct? Discuss. Debits and Credits Summary

10 Assets - Debits should exceed credits. Liabilities – Credits should exceed debits. The normal balance is on the increase side. SO 2 Define debits and credits and explain their use in recording business transactions. Assets and Liabilities

11 A list of accounts and their balances at a given time. Purpose is to prove that debits equal credits. The Trial Balance SO 7 Prepare a trial balance and explain its purposes.

12 The trial balance may balance even when 1. a transaction is not journalized, 2. a correct journal entry is not posted, 3. a journal entry is posted twice, 4. incorrect accounts are used in journalizing or posting, or 5. offsetting errors are made in recording the amount of a transaction. The Trial Balance SO 7 Prepare a trial balance and explain its purposes. Limitations of a Trial Balance

13 A trial balance will not balance if: a. a correct journal entry is posted twice. b. the purchase of supplies on account is debited to Supplies and credited to Cash. c. a $100 cash dividends is debited to the Dividends account for $1,000 and credited to Cash for $100. d. a $450 payment on account is debited to Accounts Payable for $45 and credited to Cash for $45. Review Question The Trial Balance SO 7 Prepare a trial balance and explain its purposes.

14 Q2-19. Jim Benes is confused about how accounting information flows through the accounting system. He believes the flow of information is as follows. a. Debits and credits posted to the ledger. b. Business transaction occurs. c. Information entered in the journal. d. Financial statements are prepared. e. Trial balance is prepared. Is Jim correct? If not, indicate to Jim the proper flow of the information. See notes page for discussion Recording Process Discussion Question SO 7 Prepare a trial balance and explain its purposes.