ARBUS102 Chapter Notes - Chapter 2: Accounting Equation, Promissory Note, Investment
19 Jan 2016
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Chapter 2: reporting investing and financial results on the balance sheet. A business must invest in assets required to operate the business. Assets can be purchased with cash or no account. The business gives cheques for , 000. Activities that affect the basic accounting equation (a = l + se) Involve assets, liabilities, and shareholders" equity b/w the company. Occur within the company; for example, using assets to create an. Step 1: analyze transactions: duality of effects. Give and receive : a = l + se must hold true. Means every transaction has at least 2 effects on the basic accounting. A summary of all account names (and corresponding account numbers) used to record financial results in the accounting system. Means there will be 2 accounts affected by each transaction. A debit and a credit i. e. if you purchased a book, your value of books would increase, but your value of cash would decrease by the same value/time.
