Management and Organizational Studies 1023A/B Chapter Notes - Chapter 3: Accounting Equation, The Ledger, Financial Statement

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

Accounting information system the system of collecting and processing transaction data and communicating financial information to decision makers. Factors that shape these systems include: type of business, size of the company, amount of data, information that management and others need data should be collected and processed. An accounting system begins with determining what relevant transaction: only events that cause a change in assets, liabilities, or shareholders". An accounting transaction occurs when assets, liabilities or shareholders" equity items change equity are recorded. The accounting equation must always balance each transaction has a dual. An account is an individual accounting record of increases and decreases in a. The account specific asset, liability or shareholders equity item. The debit is on the left side and the credit is on the right side. If the total of the account remains on the left side it has a debit balance and if its on the right side it has a credit balance.