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Lecture 3

ACG-2021 Lecture Notes - Lecture 3: The Ledger, Accounting Equation, Trial Balance

3 pages28 viewsFall 2017

Department
Accounting
Course Code
ACG-2021
Professor
Jeff S Paterson
Lecture
3

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Chapter 3
(The Accounting Information System)
-system of Collecting and processing transaction data and communicating
financial information to decision makers.
Assets liabilities, or stockholders equity items change as a result of some
economic event. Assets= Liabilities+ Stock
Holders equity
Dual Effect: Accounting equation will always balance every transaction effects 2
accounts.
Debit: “Left”
Credit: “Right”
An account can be illustrated in a T- Account Form; which includes Account
name debit and credit.
Double entry System: Each transaction must have 2 or more accounts to keep
basic equation in balance.
(Debits must equal credits)
If debits are greater then credits, the account will have a debit balance.
If credits are greater then debits then the account will have a credit balance.
Assets: increase Debits
Liabilities: increase Credits
Stock holders Equity: increase credits
Dividends: decrease with credits
Cedit: revenue
Debit: expenses
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