BUSN 70 Lecture Notes - Lecture 34: Computer File, Financial Statement, Retained Earnings
13 Mar 2021
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Document Summary
The four-step procedure of an accounting system: examining source documents, recording transactions in an accounting journal, posting recorded transactions, and preparing financial statements. Journal = a time-ordered list of account transactions. Ledger = a book or computer file with separate sections for each account. A snapshot of an organization"s financial position at a given moment - know for midterm. Shows assets and the funding used to pay for these assets, such as bank debt or owners" equity. Takes its name from its reliance on the accounting equation: assets must equal liabilities plus owners" equity. The balance sheet is an accumulation of all financial transactions since the company"s founding. Listed in descending order of liquidity how fast they can be turned into cash. Current assets (how fast can we turn them into cash within/less than 1 year) Assets used or converted into cash within the course of a calendar year. Cash, temporary investments, accounts receivable and inventory.
