1. Analyzing & Recording Business Transactions
Chapter 2

2. Source documents
Identify and describe transactions and events entering the accounting process.

3. Account
Is a record of increases and decreases in a specific asset, liability, equity, revenue or expense
Ledger
Is a record containing all accounts used by a company

4. Assets Cash Accounts receivable Note receivable Prepaid Accounts
What customers owe us
Note receivable
Prepaid Accounts
Supplies
Equipment

5. Liabilities Accounts payable Notes payable Unearned revenue
Money owed to suppliers
Notes payable
Unearned revenue
Deposits from customers

6. Equity Common Stock Dividends Retained Earnings
Shareholders investment in the business
Dividends
Distributions of income to shareholders
Retained Earnings

7. Chart of Accounts
List of an accounts a company uses and includes an idea.
Assets
Liabilities
Equity
Revenues
Expenses

8. T- Accounts
Debit
Credit
Right side
Left side

9. Accounting Equation Assets = Liabilities + Equity DR DR CR DR CR CR     
Double entry accounting: each transactions affect,
And recorded in, at least two accounts
Debits = Credits

10. Journal Journal Journalizing Posting
Gives a complete record of each transaction in one place
Journalizing
Process of recording transactions
Posting
Process of transferring journal entry info to the ledger

11. Journal
Date
Account PR
Debit
Credit

12. Journal Entries
Go to excel worksheet

13. Transactions Shareholder invests in the business $30,000 in cash
Co pays $2,500 cash for supplies
Co pays $26,000 cash for equipment
Co purchases $7,100 of supplies on account ( on credit)
Co provides consulting services and collects $4,200 cash

14. Transactions Co pays for $1,000 cash for rent
Co pays $700 cash for salaries
Co provides consulting services of $1,600 and bills the customer
Co receives $1,600 cash from the client billed
Co pays $900 on account
Co pays dividends $1,000

15. Transactions Co receives $3,000 cash in advance
Co pays $2,400 cash for insurance for one year

16. Posting to the ledger
Record the transactions into ledger by account name
Prepare a TRIAL BALANCE
List of accounts and balances