MGMT 30A Chapter Notes - Chapter 3: Accounts Payable, Accounting Equation, Trial Balance

• School: UC-Irvine
• Department: Management
• Course: MGMT 30A
• Professor: Machiavelli Chao

Document Summary

Analyze the effect of business transactions on the basic accounting equation. Explain how accounts, debits, and credits are used to record business transactions. Indicate how a journal is used in the recording process. Explain how a ledger and posting help in the recording process. Accounting information system = the system of collecting and processing transaction data and communicating financial information to decision-makers. Ais rely on a process called the accounting cycle. Begins with the analyss of business transactions and ends with the preparation of a post-closing trail balance. An accounting transaction occurs when assets, liabilities, or stockholders" equity items change as a result of some economic event. Purchase computer yes, there is a financial position changed. Discuss guided trip options with potential customer no. Transaction analysis = identifying the specific effects of economic events on the accounting equation. The accounting equation must always be balance. Each transaction has a dual effect on the equation.