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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Called the double entry accounting system because it requires that each transaction be recorded in a way that affects at least 2 accounts, with the transaction amount recorded in each account. Most significant limitation of the template method: the number of columns that can be manageably used. Limits the info that management can capture and analyze. Double entry accounting system overcomes this limitation by enabling companies to use hundreds+ of accounts to capture info at the level of detail required to manage the business effectively. Enables businesses to capture transaction deals while making it easy to summarize info by account. Liabilities and shareholder"s equity normally have a credit balance. The most current assets will come before the non-current assets and the current liabilities will come before the non-current liabilities > liquidity. Each account is referred to as a general ledger account. Revenues ultimately increase re because they increase net income, which increases re.
