MGCR 211 Lecture Notes - Lecture 3: Trial Balance, General Ledger, Accounting Information System
Document Summary
Opening balance: the balance brought forward at the beginning of an accounting period. First item in the accounts, wither when a company is first starting up its accounts or after a year-end. You can find opening balances on the balance sheet, never the income statement. Chart of accounts: is a listing of the names of the account that a company has identified and made available for recording transactions. Transaction: any event that both affects the financial position of the business entity and can be reliably recorded. Some economic events involve an exchange of promises only (executor contracts) and they are not accounting transactions ex: signing a lease, taking a customer order, hiring a new employee. Always at least two entries when recording a transactions so that equation stays in balance. If 20 canoes sold that is revenue, but it is also increases assets or accounts receivable.
