Chapter 3 - The accounting information system. After studying this chapter, you should be able to: Discuss financial reporting concepts, analyze the effect of business transactions on the basic accounting equation. | THE ACCOUNTING INFORMATION SYSTEM Accounting, Fifth Edition 3 After studying this chapter, you should be able to: Analyze the effect of business transactions on the basic accounting equation. Explain what an account is and how it helps in the recording process. Define debits and credits and explain how they are used to record business transactions. Identify the basic steps in the recording process. Explain what a journal is and how it helps in the recording process. Explain what a ledger is and how it helps in the recording process. Explain what posting is and how it helps in the recording process. Explain the purposes of a trial balance. Classify cash activities as operating, investing, or financing. Learning Objectives Preview of Chapter 3 Accounting Fifth Edition Kimmel Weygandt Kieso Accounting Information System System of collecting and processing transaction data and communicating financial information to decision makers. Most businesses use computerized accounting (EDP) systems. The Accounting Information System LO 1 Analyze the effect of business transactions on the basic accounting equation. Transactions are economic events that require recording in the financial statements. Not all activities represent transactions. Assets, liabilities, or stockholders’ equity items change as a result of some economic event. Dual effect on the accounting equation. Accounting Transactions LO 1 Analyze the effect of business transactions on the basic accounting equation. Question: Are the following events recorded in the accounting records? Event Purchase computer. Criterion Is the financial position (assets, liabilities, or stockholders’ equity) of the company changed? Pay rent. Record/ Don’t Record Accounting Transactions Discuss guided trip options with potential customer. Illustration 3-1 LO 1 Analyze the effect of business transactions on the basic accounting equation. Assets Liabilities Stockholders’ Equity = + Analyzing Transactions LO 1 Analyze the effect of . | THE ACCOUNTING INFORMATION SYSTEM Accounting, Fifth Edition 3 After studying this chapter, you should be able to: Analyze the effect of business transactions on the basic accounting equation. Explain what an account is and how it helps in the recording process. Define debits and credits and explain how they are used to record business transactions. Identify the basic steps in the recording process. Explain what a journal is and how it helps in the recording process. Explain what a ledger is and how it helps in the recording process. Explain what posting is and how it helps in the recording process. Explain the purposes of a trial balance. Classify cash activities as operating, investing, or financing. Learning Objectives Preview of Chapter 3 Accounting Fifth Edition Kimmel Weygandt Kieso Accounting Information System System of collecting and processing transaction data and communicating financial information to decision makers. Most businesses use computerized accounting (EDP) .
