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Canada (161,869)
MGAB01H3 (126)
G.Quan Fun (21)
Chapter 3


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Financial Accounting
G.Quan Fun

Saturday, September 19, 2009 TN: Chapter 1 [MGTB05] Accounting Transactions Accounting Information System: system of collecting and processing transaction data and communicating financial information to decision-makers • Vary depending on the size, type of business, amount of data, type of information needed • Determining what transaction data should be collected and processed Only events that cause changes in accounting equation should be recorded Accounting Transaction: occurs whenA., L., & SE. items change because of an economic event Reminder: 1. Each transaction must be analyzed for its effect on the three main components of the accounting equation (assets, liabilities, shareholders’equity) 2. Two sides of the equation must always be equal The Account Accounts: an individual accounting record of increases & decreases in a specific item Debit and Credit Debiting: the process of entering an amount on the left side, vise versa for crediting Debit Balance: when total of debit exceeds the credit, vise versa for credit balance Double-EntryAccounting System: each transaction effects two or more accounts Dr Cr Assets = Liabilities + Shareholders’Equity Cr Dr I. AssetsAccounts a) Show debit balance (i.e. Debits should exceed credit
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