MGAB03H3 Lecture Notes - Documenta
7 May 2013
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Document Summary
Transaction-an exchange of goods that have value (i. e. buy a truck for ) Source document-a business paper that is the original record of a transaction (i. e. hydro bills, telephone bills, cheques, receipts) The objectivity principle-accounting will be recorded on the basis of objective evidence. Uses the accounts from a balance sheet (assets, liabilities, owner"s equity) Used to study and record changes in financial position. Account-a page that is made to record the changes of an individual transaction. A simple ledger is a group of t-accounts. Assets go on the right side, liabilities and owner"s equity on the left. Accounting entry-all the changes in the accounts caused by a single transaction. Double-entry system of accounting-every transaction is recorded as a debit an then credit. Pin totals/pencil footings-tiny subtotals written on each side of a t-account. Account balance-the pencil totals on each side create the account balance.
