Management and Organizational Studies 1023A/B Chapter Notes - Chapter 3: Double-Entry Bookkeeping System, Accounting Equation, Financial Statement

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

Document Summary

Accounting information systems the system of collecting and processing transaction data and communicating financial info: varies based on four factors: Type of business and its transactions (i. e. complex transactions at western) Size of company (i. e. global company = bigger investment in info system) Amount of data (i. e. a lot of student data at western) Purchase a computer = increase assets (equip) and decrease assets (cash) Discuss a design with a potential customer = not recorded. Pay rent = decrease shareholders" equity (rent) and decrease assets (cash) *if a customer trips and falls in your store = dependent on lawyer whether you record it based on if it"s most likely a win or loss in court. Transaction analysis determines impact on the accounting equation. The accounting equation must always balance: each transaction has a dual (double-sided) effect on the equation must charge at least two accounts to balance it. One side goes up, the other side must go up.