MGMT 30A Chapter Notes - Chapter 3: Trial Balance, Accounts Payable, Cash Register

• School: UC-Irvine
• Department: Management
• Course: MGMT 30A
• Professor: Patricia Wellmeyer

Document Summary

Accounting information system: system of collecting and processing transaction data and communicating financial information to decision makings. Accounting transactions: economic events the require recording in the financial statements. Revenue is recorded after the work has been performed. Accounts receivable: represents the right to receive payment at a later date. Divide(cid:374)ds: (cid:396)edu(cid:272)tio(cid:374) of sto(cid:272)kholde(cid:396)s" e(cid:395)uit(cid:455) (cid:271)ut (cid:374)ot a(cid:374) expense, not included in calculation for (cid:374)et i(cid:374)(cid:272)o(cid:373)e, dist(cid:396)i(cid:271)utio(cid:374) of the (cid:272)o(cid:373)pa(cid:374)(cid:455)"s assets to its sto(cid:272)kholde(cid:396)s. Account: individual accounting record of increases and decreases in a specific asset, liability, sto(cid:272)kholde(cid:396)s" e(cid:395)uit(cid:455), (cid:396)eve(cid:374)ue, o(cid:396) e(cid:454)pe(cid:374)se ite(cid:373) Debit balance: total of the debit amounts exceeds the credits. Credit balance: total credit amounts exceed the debtis. We record increases in cash as debits and decreases in cash as credits. Double-entry system: two-sided effect of each transaction is recorded in appropriate accounts, provides logical method for recording transactions, ensures accuracy of the recorded amounts and helps to detect errors.