RSM219H1 Chapter Notes - Chapter 3: Accounting Information System, Template Method Pattern, General Ledger
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RSM219H1 Full Course Notes
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Document Summary
We will see how data is recorded to make the extraction easy for generating financial statements and other reports. Double-entry accounting and how it overcomes the limitations of template method. It requires each transaction to be recorded in a way that it affects at least 2 accounts, with recording the same amount in both accounts. The total effect of both the entries would be equal and offsetting. This method overcomes the limitation of template method having limited number of columns. This method allows for companies to have unlimited number of accounts and record everything in detail to make the summarization, for later, easy. Left side is the debit side and right side is the credit side. Assets, on the left side, normally have a debit (cid:271)ala(cid:374)(cid:272)e, a(cid:374)d lia(cid:271)ilities + sha(cid:396)eholde(cid:396)s" e(cid:395)uit(cid:455), o(cid:374) the (cid:396)ight side, normally have a credit balance. For examples, cash is an asset and will be on the left side, therefore, it will have a debit balance.
