ACC 331 Lecture Notes - Lecture 5: General Ledger
12 Sep 2018
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Economic event: anything that causes a change in the company"s nancial position. External event: a nancial event that happens between the company and some external company/entity or another party. Ex: taking a loan from a bank. This is an external event because the company is going to an outside source for the asset. Ex: buying a computer for the company. Take away cash assets, add equipment asset. Every expense is an expenditure, but not every expenditure is an expense. If what you spend the money on is going to produce future revenue generating power it is an asset not an expense. If what you spend the money on is being used and is already in use to produce something, it is an expense, not an asset. The journal is a listing of all transactions in chronological order. Keeps track of all of the accounts. In a ledger each page represents an account such as cash, equipment, a/r, inventory.
