Management and Organizational Studies 1023A/B Lecture Notes - Lecture 3: Step One, General Journal, Main Source

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

Accounting information system the system of collecting and processing transaction data and communicating financial information. Can very widely based on factors such as: Transactions are economic events that must be recorded in the financial statements. Not all events are recorded and reported as accounting transactions, only those that change assets, liabilities, or shareholders equity. Accounting transaction occurs when assets, liabilities, or shareholder"s equity items change as a result of some economic event. Transaction analysis determines impact on the accounting equation. Remember the accounting equation must always balance. Therefore each transaction has dual (double sided) effect on the equation. Account is an individual accounting record of increases and decreases in a specific asset, liability, or shareholder"s equity item. The account: the title of the account, a left/debit side, a right/credit side. Debits and credits: merely directional signals used into recording process to describe where entries are made in the accounts.