Business Administration 2257 Chapter Notes - Chapter 3: Cash Cash, Retained Earnings

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Eleni Petrou

Document Summary

Accounting information system = system of collecting and processing transaction data and communicating financial information to decision makers. Type of business, size of company, amount of data, information that management and others need. Accounting information system begins with finding out what relevant transaction data should be collected and processed. Accounting transaction occurs when assets, liabilities, or shareholder"s equity items change as a result of an economic event. Shareholders" equity = common shares + retained earnings. Retained earnings = revenues - expenses - dividends. 000 cash was invested in a company for 10 000 shares. Borrowed from the bank to buy equipment, promised to repay the loan, + 6% interest/year in three months. Paid worth of office rent in cash. Paid for a one year insurance plan in cash. Hired 4 new employees with a weekly salary of (weekdays) paid every two weeks set to start on.