BUS 251 Lecture Notes - Lecture 4: Financial Statement, Income Statement, General Journal

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Anne Mcdonald

Document Summary

Lecture notes: bus 251 d1 (18-1, anne macdonald, chapter 3, double entry accounting and the accounting cycle, recording accounting transactions. The recording of each transaction must change (at least) 2 elements in the equation in order to keep in balance. Assets (cid:894)a(cid:895) = lia(cid:271)ilities (cid:894)l(cid:895) + sha(cid:396)eholde(cid:396)s" e(cid:395)uit(cid:455) (cid:894)se(cid:895: double entry accounting systems. Ch. 3 i(cid:374)trodu(cid:272)es the ter(cid:373)s, (cid:858)de(cid:271)it(cid:859) a(cid:374)d (cid:858)(cid:272)redit(cid:859) to our tra(cid:374)sa(cid:272)tio(cid:374) a(cid:374)al(cid:455)sis. The idea of debits and credits extends to the income statement also: double entry accounting systems. But for accounting purposes: a de(cid:271)it (cid:894)o(cid:396) (cid:272)(cid:396)edit(cid:895) tells (cid:455)ou onl(cid:455) (cid:449)hethe(cid:396) an a(cid:272)(cid:272)ount o(cid:396) . The prese(cid:374)tatio(cid:374) of a(cid:374) e(cid:448)e(cid:374)t i(cid:374) the f/s (cid:373)ust refle(cid:272)t the (cid:858)realit(cid:455)(cid:859) of the e(cid:448)e(cid:374)t at the date of the f/s. This may require an adjustment to how the event was originally recorded. Involve a past exchange of goods/services: measurable, occur between the organization and an outsider, often verifiable through source documents, adjustments. To reflect a change in the recording of a transaction.