Management and Organizational Studies 1023A/B Chapter Notes - Chapter 3: Retained Earnings, General Ledger, Trial Balance

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

Document Summary

Chapter three: accounting info system system of collecting and processing transaction data and communication financial info to decision makers is known as accounting info system should be recorded change as a result of some economic event. Only those events that cause changes in assets, liabilities, or s/e. Accounting transaction occurs when assets, liabilities, or s/e items. Eg: 10,000$ invested in 10,000 shares = debit cash for 10,000 and increase in s/e and asset debit common shares. Eg: borrowed ,000 by signing note payable, promised to repay with. Cash increased by ,000 (asset) and notes payable (liability) Increase in assets and liabilities increases by ,000. Transaction (3): purchase of equipment increase cash (asset) and increase in unearned revenue (liability) Transaction (4): receipt of cash in advance from customer. Equipment increases by ,000 and cash decreases by ,000. Cash decreased (asset), rent expense increased: rent is an expense incurred in its efforts to generate revenues, expenses decrease r/e, which decrease s/e.