RSM219H1 Chapter Notes - Chapter 3: Net Income, General Ledger, Retained Earnings

• School: UTSG
• Department: Rotman Commerce
• Course: RSM219H1
• Professor: Christian Campbell

Document Summary

Revenues accounts will normally have a credit balance. This is because they increase re and re normally has a credit balance, so it must be credited to increase it. Expense accounts will normally have a debit balance. Dividends declared will normally have a debit balance. This is because they decrease re and re normally has a credit balance, so it must be debited to decrease it. Accouning cycle - the whole system by which transacions are irst measured, recorded, and summarized, and then communicated to users through inancial statements. Chart of accounts - the list of all company"s accounts. Companies can change their chart of accounts, but changes to the temporary accounts (revenue and expense accounts) are generally made only at the beginning of an accouning period. Permanent accounts - accounts with balances that carry over from one period to the next. Temporary accounts - accounts with balances that are closed at the end of each accouning period. (dividends declared).