ACC 100 Chapter Notes - Chapter 3: Financial Statement, Accounting Equation, Accounts Receivable

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Chapter 3 using accounts in transaction analysis. Financial information is important for stakeholders/business to make their decisions. It is easier to make their next steps and evaluate any past activities. An accounting system should provide information that is useful for decision making. But even using the expanded accounting equation it is still not enough information to make decisions. A good accounting system subdivides the financial reporting elements so that more detailed information is available. For example, an account called cash under the elements assets would track cash transactions so you would know your total cash at the end of the money immediately. Accounts are common subgroups of financial reporting elements that are used to accumulate (gather) business activities. First analyze all the transactions using the elements but then use accounts to subdivide the elements and record the business activities. (read pg. The video suggests you use a professional naming business.

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