In this chapter, the following content will be discussed: Understand basic accounting terminology; explain double-entry rules; identify steps in the accounting cycle; record transactions in journals, post to ledger accounts, and prepare a trial balance; explain the reasons for preparing adjusting entries. | 3 Review of Accounting Information System Understand basic accounting terminology. Explain double-entry rules. Identify steps in the accounting cycle. Record transactions in journals, post to ledger accounts, and prepare a trial balance. Explain the reasons for preparing adjusting entries. Learning Objectives Identifying and recording Journalizing Posting Trial balance Adjusting entries Adjusted trial balance Preparing financial statements Closing Post-closing trial balance Reversing entries Accounting Information System The Accounting Cycle Financial Statements for Merchandisers Basic terminology Debits and credits Accounting equation Financial statements and ownership structure Income statement Statement of retained earnings Balance sheet Closing entries The Accounting Information System Collects and processes transaction data. Disseminates the information to interested parties. Accounting Information System Accounting Information System (AIS) LO 1 Understand basic accounting . | 3 Review of Accounting Information System Understand basic accounting terminology. Explain double-entry rules. Identify steps in the accounting cycle. Record transactions in journals, post to ledger accounts, and prepare a trial balance. Explain the reasons for preparing adjusting entries. Learning Objectives Identifying and recording Journalizing Posting Trial balance Adjusting entries Adjusted trial balance Preparing financial statements Closing Post-closing trial balance Reversing entries Accounting Information System The Accounting Cycle Financial Statements for Merchandisers Basic terminology Debits and credits Accounting equation Financial statements and ownership structure Income statement Statement of retained earnings Balance sheet Closing entries The Accounting Information System Collects and processes transaction data. Disseminates the information to interested parties. Accounting Information System Accounting Information System (AIS) LO 1 Understand basic accounting terminology. Journal Posting Trial Balance Adjusting Entries Financial Statements Closing Entries Basic Terminology Accounting Information System Event Transaction Account Real Account Nominal Account Ledger Accounting Information System LO 2 Explain double-entry rules. An Account shows the effect of transactions on a given asset, liability, equity, revenue, or expense account. Double-entry accounting system (two-sided effect). Recording done by debiting at least one account and crediting another. DEBITS must equal CREDITS. Debits and Credits Debits and Credits An arrangement that shows the effect of transactions on an account. Debit = “Left” Credit = “Right” Account LO 2 Explain double-entry rules. An Account can be illustrated in a T-Account form. Debits and Credits LO 2 Explain double-entry rules. $10,000 Transaction #2 $3,000 $15,000 8,000 Balance Transaction #1 Transaction #3 If Debit entries are greater than Credit entries, the account will have a debit balance. Debits and Credits If .
