Business Administration 2257 Chapter 3: Chapter 3 - The Accounting Information System.docx

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Amy Shuh

Document Summary

Accounting information system the system of collecting and processing transaction data and communicating financial information to decision-makers. Only those events that cause changes in assets, liabilities, or shareholders" equity should be recorded. Accounting transaction occurs when assets, liabilities, or shareholders" equity items change as a result of some economic event. Account an individual accounting record of increases and decreases in a specific asset, liability or shareholders" equity item. Consists of 3 parts: (1) title of account, (2) a left or right debit side, and (3}) a right credit side. Double-entry accounting system the dual (two-sided) effect of each transaction is recorded in appropriate accounts. Increases in asset accounts are recorded by debits; decreases in asset accounts are recorded by credits.