Bài giảng Financial Accounting - Chapter 2: The Accounting Cycle: During the Period

The Accounting Cycle: During the PeriodChapter 2 Learning ObjectivesIdentify the basic steps in measuring external transactionsAnalyze the impact of external transactions on the accounting equationAssess whether the impact of external transactions results in a debit or credit to an account balanceRecord transactions using debits and creditsPost transactions to T-accounts in the general ledgerPrepare a trial balanceFunctions of Financial AccountingMeasure business activities of the companyCommunicate measurements to external parties for decision makingPart AMeasuring Business Activities2-4Learning Objective 1Identify the Basic Steps in Measuring External Transactions. 2-5External TransactionsTransactions conducted with a separate economic entityInternal transaction: events that affect the financial position of the company but do not include an exchange with a separate economic entityCapturing Transactions in AccountsAccount: Summary of all transactions related to a particular item over a period of time.Asset accounts: Cash, Supplies, and EquipmentLiability accounts: Accounts Payable, Salaries Payable, Utilities Payable, and Taxes PayableStockholders’ equity accounts: Common Stock and Retained EarningsChart of accounts: A list of all account names used to record transactionsMeasuring External Transactions2-8Learning Objective 2Analyze the impact of external transactions on the accounting equation.2-9Effects on the Basic Accounting EquationEach transaction will have a dual effectAn increase on one side will increase the other sideUnderstanding Effects of TransactionAsk these questions:What is one account affected by the transaction? Does it increase or decrease?What is a second account affected by the transaction? Does it increase or decrease?Do assets still equal liabilities plus stockholders’ equity?The Expanded Accounting Equation2-12Part BDebits and Credits2-13Learning Objective 3Assess Whether the Impact of External Transactions Results in a Debit or Credit to an Account Balance.2-14Effects on Account Balances2-15Debit and Credit Effects on Accounts in the Expanded Accounting Equation2-16Debit and Credit Effects on Each Account TypeA simpler memory wayLearning Objective 4Record transactions using debits and credits.2-18Recording TransactionsJournal: provides a chronological record of all transactionsJournal entry: format used for recording transactionsDebits in a transaction must equal its creditsLearning Objective 5Post transactions to T-accounts in the general ledger.2-20PostingPosting: process of transferring the debit and credit information from the journal to individual accounts in the general ledgerGeneral ledger: includes all accounts used to record the company’s transactionsUseful to calculate the account balancesT-account: a simplified form of a general ledger accountLearning Objective 3Prepare a Trial Balance.2-22Trial BalanceA list of all accounts and their balances at a particular dateShows that total debits equal total creditsAssists in preparing adjusting entriesUsed for internal purposes onlyNot published to external partiesNot required to follow an order of listingEnd of Chapter 22-24