ACCT 2101 Chapter Notes - Chapter 2: Deferred Income, Cash Cash, Accounting Equation
11 Sep 2017
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Chapter 2: the accounting cycle: during the period. Use source documents to identify accounts affected by external transaction: 2. Analyze the impact of the transaction on the accounting equation: 3. Assess whether the transaction results in a debit or credit to account balances: 4. Record transaction in a journal using debits and credits: 5. Post the transaction to the general ledger: 6. Issuing common stock: cash and total assets would increase by 25,000, common stock and total se increase, 2. Borrow cash from bank: cash and total assets increase, notes payable (amount owed to creditors/bank) incurs debt, so total liabilities increase, 3. Purchase equipment: equipment increases, cash decreases, so there is no affect on total assets, 4. Pay for rent in advance: prepaid rent/insurance/advertising is an asset that increases, while cash decreases, no change in total assets, 5. Provide services for cash: cash and stockholders equity will increase, 7.
