acct 201 acct 201 acct 201 accounting information system chapter 1 dr. balamurugan muthuraman...
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DESCRIPTIONPreparers ASB Auditors Decision makers GAAP Financial Reporting Environment Financial Statements Audit Report FASB GAAS
ACCT 201 ACCT 201 ACCT 201 Accounting Information System Chapter 1 Dr. BALAMURUGAN MUTHURAMAN Operating Environment The Accounting System: A Conceptual Overview Business Entity A Process and Summarize System Outputs: Financial Statements and Reports System Inputs: Measurable Transactions and Events Entity BEntity C Entity DEntity E Preparers ASB Auditors Decision makers GAAP Financial Reporting Environment Financial Statements Audit Report FASB GAAS Management Users Income Statement Balance Sheet Statement of Cash Flows Management Prepares Auditors Basic Mistrust Lends Credibility Independent Auditor G A A P G A A S International Accounting Principles Despite our growing global economy, countries continue to maintain their unique set of acceptable accounting practices ACCT 201 ACCT 201 ACCT 201 Learning Objective Identify, explain, and apply accounting principles. Conceptual A business is accounted for separately from its owner(s). Financial Statement information is supported by independent, unbiased evidence. A business continues operation instead of being closed or sold Express transactions and events in monetary units. Financial statements are based on actual costs incurred in business transactions ACCT 201 ACCT 201 ACCT 201 Accounting Information System Text Section: Transactions, Documents, and Accounts (p. 41) ACCT 201 ACCT 201 ACCT 201 Learning Objective Identify, explain, and apply accounting principles. Conceptual Source documents Recording & posting Trial balance Reporting Transaction or event Analysis The Accounting Process Exh External Transactions occur between the organization and an outside party. Internal Transactions occur within the organization. Transactions and Events Exchanges of economic consideration between two parties Ongoing events in world Recording Data Bank Classifying Information Accounting Information System Boundary ACCT 201 ACCT 201 ACCT 201 Learning Objective Describe source documents and their purpose. C4 Conceptual Source Documents Invoices Other Check Stubs Journal Bank Statement ACCT 201 ACCT 201 ACCT 201 Learning Objective Describe an account and its uses in recording transactions. Conceptual ACCT 201 ACCT 201 ACCT 201 Account A storage unit used to classify and summarize money measurements of business activity of a similar nature ACCT 201 ACCT 201 ACCT 201 Detailed record of increases and decreases in specific assets, liabilities, equities, revenues, or expenses. ======================= Separate accounts are maintained for each item of importance. The Account Accts Rec. The General Ledger General Ledger Inventory Cash Notes Pay. Mortgage Accts Pay. Revenue Expenses Retained Earnings ACCT 201 ACCT 201 ACCT Account Title Left Side Right Side ACCT 201 ACCT 201 ACCT 201 The Formal Account The Balance Column Ledger Account Title Account No. ### DateItem Post RefDebitCredit Balance DebitCredit AssetsLiabilities Owners Equity Capital Stock Retained Earnings ExpensesRevenue =+ Net Income - = The Accounting Equation A = L + OE