1 / 16

Analyzing & Recording Business Transactions

Analyzing & Recording Business Transactions. Chapter 2. Source documents. Identify and describe transactions and events entering the accounting process. Account. Is a record of increases and decreases in a specific asset, liability, equity, revenue or expense Ledger

pules
Download Presentation

Analyzing & Recording Business Transactions

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  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 • What customers owe us • Note receivable • Prepaid Accounts • Supplies • Equipment

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

  6. Equity • Common Stock • 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. • 101-199 Assets • 201-299 Liabilities • 301-399 Equity • 401-499 Revenues • 501-599 Expenses

  8. T- Accounts Debit Credit Right side Left side

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

  10. Journal 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 Journal

  11. Journal

  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

More Related