MGT120H5 Chapter Notes - Chapter 2: Deferral, Retained Earnings, The Ledger
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MGT120H5 Full Course Notes
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Document Summary
Businesses engage in many activities that result in transactions that are recorded in the accounting records. Each asset, liability, and element of shareholders" equity has its own account, which is used to record all the transactions affecting the related asset, liability or element of shareholders" equity during an accounting period. Consists of bank account balances, paper currency and coins, and deposited cheques. Represents the amounts owing from customers who have purchased goods or services on credit. Includes the goods a company sells to its customers. Companies that make the products they sell also have inventory consisting of the raw materials used to produce the finished products and any partially finished products. Consist of expenses a company has paid in advance of actually using the product or service it has purchased. Includes any land a company uses in its operations. Any office buildings, factories, and other buildings owned by a company.
