RSM219H1 Chapter Notes - Chapter 3: Double-Entry Bookkeeping System, Accounting Information System, Deferred Income
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RSM219H1 Full Course Notes
Verified Note
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Document Summary
Chapter 3 - double entry accounting & the accounting cycle. Each transaction is recorded in at least two accounts & recorded twice. Total effects of these entries will be equal and offsetting. # of columns -- e. g. organisation may want specific accounts/columns for each type of inventory. Overcomes this limitation by enabling companies to use hundreds & thousands of accounts. Enables businesses to capture details while making it easy to summarize info by account. Liabilities & shareholder"s equity accounts normally have a balance credit. Template system: each account has its own column in which the transaction affecting it were recorded. Within each account, there is an order of liquidity. Most current assets will come before the non-current assets. General ledger (g/l) & each account is referred to as a general ledger account. All transactions affecting the account are recorded as debits or credits.
