ADMN 1021H Chapter Notes - Chapter 3: Accounting Equation, Trial Balance, Accounting Information System
2 Feb 2020
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The accounting cycle: analyze transactions, journalize, post, trial balance, adjusting entries, adjusted trial balance, financial statements, closing entries, post-closing trial balance. L-o 1: step 1 - analyze the effect of transactions on the accounting equation. Accounting transaction an economic event that is recorded in the financial statements because it involves an exchange that affects assets, liabilities, and/or shareholders" equity. L-o 2: explain how accounts, debits, and credits are used to record transactions. In its simplest form a t account (general ledge account) consists of three parts: the title of the account, a left (debit) side, a right (credit) side. Debit simply means left and credit simply means right. Quite often a date will be included next to the debit or credit amount in order to identify the transaction. Normal balance the side of an account used to increase the account. Double-entry accounting system a system that records the dual effect of each transaction in appropriate accounts.
