ENG ELC 220 Lecture Notes - Lecture 18: Financial Statement, Trial Balance, Retained Earnings
1 Nov 2020
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Document Summary
A transaction is any event that has a financial impact on the business and can be measured reliably. Transactions provide objective information about the financial impact on a company. Every transaction has two sides: you give something, you receive something. An account is the record of all changes in a particular asset, liability, or shareholders" equity during a period. The account is the basic summary device pf accounting. Assets are economic resources that provide a future benefit for a business. Cash: money and any medium of exchange including bank account balances. Accounts receivable: holds the amounts when goods and services are sold and cash will be collected later. Notes receivable: similar to an account receivable, but more binding because the customer signed the note. Prepaid expenses: payment provides a future benefit for the business (e. g. prepaid rent, prepaid insurance, and supplies) Buildings: includes cost of office building, manufacturing plant, etc.
