ACG-2021 Lecture Notes - Lecture 3: Cash Register, Accounting Equation, Trial Balance
Document Summary
The accounting information system: system of. Accounting transactions: transactions are economic events that require recording in the financial statements. Not all activities and economic events represent transactions. Assets, lia(cid:271)ilities, o(cid:396) sto(cid:272)kholde(cid:396)s" e(cid:395)uit(cid:455) ite(cid:373)s (cid:272)ha(cid:374)ge as a (cid:396)esult of so(cid:373)e economic event. Dual effect on the accounting equation: analyzing transactions. The process of identifying the specific effects of economic events on the accounting equation. Record of increases and decreases in a specific asset, liability, equity, revenue, or expense item. An account can be illustrated in a t-account form: debit and credit procedures. Each transaction must affect two or more accounts to keep the basic accounting equation in balance. Recording done by debiting at least one account and crediting another for the same amount. Some transactions affect more than two accounts, but total debits must still equal total credit. If debits are greater than credits, the account will have a debit balance.
