acct 201 acct 201 acct 201 accounting information system uaa – acct 201 principles of...
Click here to load reader
out of 49
Post on 17-Dec-2015
Embed Size (px)
- Slide 1
- ACCT 201 ACCT 201 ACCT 201 Accounting Information System UAA ACCT 201 Principles of Financial Accounting Dr. Fred Barbee Chapter 2
- Slide 2
- ACCT 201 ACCT 201 ACCT 201 Accounting Information System First... A brief review of Day #2 Topics. Chapter 2
- Slide 3
- ACCT 201 ACCT 201 ACCT 201
- Slide 4
- Debits and Credits The debit/credit convention or coding system is very simple. Do not make it difficult because you cannot accept its simplicity.
- Slide 5
- ACCT 201 ACCT 201 ACCT 201 Debits Debit comes from Latin and merely means left, or the left- hand side of an account. Abbreviated DR.
- Slide 6
- Account Title Left Side Debit Side We need to stop here and change our way of thinking!
- Slide 7
- Symbolically, lets erase that memory C:\memory\debit\erase *.* Are you sure (Y/N)? All files in directory will be deleted
- Slide 8
- ACCT 201 ACCT 201 ACCT 201 Credits Credit also comes from the Latin, and means right, or the right- hand side of an account. Abbreviated CR.
- Slide 9
- Account Title Right Side Credit Side Lets stop here and modify our thinking at least for this class!
- Slide 10
- Symbolically, lets erase that memory C:\memory\credit\erase *.* Are you sure (Y/N)? All files in directory will be deleted
- Slide 11
- Assets Liabilities Owners Equity The algebraic relationship in the fundamental accounting model. ACCT 201 ACCT 201 ACCT 201
- Slide 12
- Account Title DebitCredit Always ACCT 201 ACCT 201 ACCT 201
- Slide 13
- DRCR Assets Liabilities DRCR DRCR Owners Equity
- Slide 14
- DebitsCredits The Second Equality... The algebraic relationship between account increases and decreases. ACCT 201 ACCT 201 ACCT 201
- Slide 15
- Expenses Revenue Owners Equity Liabilities Assets Debit-Credit Rules... DebitCredit Debit CreditDebit CreditDebit Credit Account Inc.Dec.
- Slide 16
- Debit-Credit Rules... DebitsCredits Assets Expenses Liabilities Equity Revenue Increase Decrease Liabilities Equity Revenue Assets Expenses
- Slide 17
- ebits ncrease ssets xpenses
- Slide 18
- iabilities evenues redits ncrease quity
- Slide 19
- Step 4: Record the journal information in a ledger. Step 3: Record transactions in a journal. Step 5: Prepare a trial balance. Steps in Processing Transactions Step 1: Examine source documents. Liabilities Equity Assets =+ Step 2: Analyze transactions.
- Slide 20
- ACCT 201 ACCT 201 ACCT 201 General Journal Page 1 DateDescriptionPRDebitCredit Jan6Art Supplies1,800 Office Supplies800 Accounts Payable2,600 Purchase of art and office supplies on credit
- Slide 21
- Transaction Date Titles of Affected Accounts Dollar amount of debits and credits Transaction explanation General Journal for FastForward
- Slide 22
- T-accounts are useful illustrations, but balance column ledger accounts are used in practice. Balance Column Ledger
- Slide 23
- 1 Identify the account. Posting Journal Entries - Example
- Slide 24
- 2 Enter the date. Posting Journal Entries - Example
- Slide 25
- 3 Enter the amount. Posting Journal Entries - Example
- Slide 26
- 4 Enter the journal reference. Posting Journal Entries - Example
- Slide 27
- 5 Compute the balance. Posting Journal Entries - Example
- Slide 28
- Enter the ledger reference. 6 Posting Journal Entries - Example
- Slide 29
- ACCT 201 ACCT 201 ACCT 201 Accounting Information System Text Section: Trial Balance (p. 63) Chapter 2
- Slide 30
- ACCT 201 ACCT 201 ACCT 201 Learning Objective Prepare and explain the use of a trial balance. P2 Procedural
- Slide 31
- ACCT 201 ACCT 201 ACCT 201 Trial Balance A Trial Balance is a listing of all accounts and their balances at a point in time.
- Slide 32
- Slide 33
- ACCT 201 ACCT 201 ACCT 201 Accounting Information System Text Section: Unadjusted Financial Statements (p. 68) Chapter 2
- Slide 34
- ACCT 201 ACCT 201 ACCT 201 Learning Objective Prepare unadjusted financial statements from business transactions. P3 Procedural
- Slide 35
- ACCT 201 ACCT 201 ACCT 201 Income Statement A statement showing revenues and expenses for a period of time. Revenues = Inflows of assets in exchange for products and services provided to customers. Expenses = Outflows or the using up of assets that result from providing products and services to customers.
- Slide 36
- Exh. 2.19
- Slide 37
- ACCT 201 ACCT 201 ACCT 201 Statement of Retained Earnings A statement showing additions to (net income) and deductions from (net loss, dividends) the Retained Earnings account.
- Slide 38
- Exh. 2.19
- Slide 39
- ACCT 201 ACCT 201 ACCT 201 Balance Sheet A statement showing the balances in asset, liability, and equity accounts at a point in time.
- Slide 40
- Exh. 2.19
- Slide 41
- ACCT 201 ACCT 201 ACCT 201 Statement of Cash Flows A statement showing the sources and uses of funds relating to the Operating Investing, and Financing Activities of a company.
- Slide 42
- Exh. 2.19
- Slide 43
- Generally, dollar signs ($) are not used in the journals or ledgers. Rounding Round numbers in financial statements to the nearest dollar. Formatting Conventions
- Slide 44
- ACCT 201 ACCT 201 ACCT 201 Accounting Information System Text Section: Decision Analysis (p. 70) Chapter 2
- Slide 45
- ACCT 201 ACCT 201 ACCT 201 Learning Objective Analyze the impact of transactions on accounts and financial statements. A2 Analytical
- Slide 46
- ACCT 201 ACCT 201 ACCT 201 Learning Objective Compute return on equity and use it to analyze company performance. A3 Analytical
- Slide 47
- ACCT 201 ACCT 201 ACCT 201 Describes the relationship between net income for the period and average equity. Helps an owner judge the compnays profitability compared to other business or personal opportunities. Using the Information - Return on Equity
- Slide 48
- ACCT 201 ACCT 201 ACCT 201 Learning Objective Compute the debt ratio and describe its use in analyzing company performance. A4 Analytical
- Slide 49
- The End