MGT120H5 Chapter Notes - Chapter 2: Double-Entry Bookkeeping System, General Ledger, Deferral
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MGT120H5 Full Course Notes
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Document Summary
Transaction: any event that has financial impact on business can be measured, provide objective info and assign $ amount to transaction. The account: summarizes the changes that occur in the accounting equation: assets: cash, a/r, inventory, notes receivable, prepaid expenses, land, buildings, equipment, liabilities: furniture, and fixtures long term liabilities : greater than 12 months (bonds and mortages) Shareholder"s equity: net income minus net losses and dividends) bank loan, notes payable, a/p, accrued liabilities (for expenses incurred but not paid), contributed capital (common shares) & retained earnings (accumulation of. Accounting cycle: transaction occurs analyze the transaction record in journal transfer to general ledger trial balance. Transaction affects financial position of business entity and can be reliably recorded. A = l + oe: cash + accounts receivable + office supplies + land = accounts payable + common shares + retained earnings. Double entry accounting: uses debits and credits to record the dual effects of each business transaction.
