ACCT 3110 1st Edition Lecture 4Outline of Last Lecture I. Measurement PrinciplesII. RecognitionsIII. Voucher PackageOutline of Current Lecture I. TransactionII. Real vs. Nominal AccountIII. Journals and LedgersIV. Revenues and ExpensesCurrent LectureChapter 3 Accounting Information SystemsUse in conjunction with PowerPoint notesSAP, Oracle- will cost millions of dollars to buy and installTransaction- not when purchase order is sent, but when product is shippedReal (permanent) account- balance sheet accounts, never closed outNominal (temporary) account- last for a maximum of a year, closed out at the end of the year into equity,revenue and expenses are just a subset of equity“If you can’t see it, T it”When analyzing transactions, use T accountsDebits are on the left, credits on the rightSubsidiary Ledger- Each item specifically accounted forGeneral Journal- Miscellaneous journal for if a transaction doesn’t fit in a specific journal. Every time youpost in the general journal you must post it to the general ledgerThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Trial Balance=General Ledger Trial Balance- List ending balances from general ledger- Debits have to equal the credits- Very good because a quick way to tell if something is wrong- Bad because it won’t catch if you post something in the wrong category (Ex. Debit to A/R instead of debit to cash)- Bad because it won’t catch duplicate entriesAt the end of the month you prepare adjusting entries- Ex. Unearned Revenue is adjusted to revenue when earnedCompanies take numbers from adjusted trial balance for balance sheet and income statementTo close out revenue and expenses:- Debit revenue, credit income summary- Credit expenses, debit income summary- Debit or credit income summary, debit or credit retained earnings- Most people close them directly to retained earningsAssets-Liabilities=EquityEquity is common stock, additional paid-in capital, dividends, retained
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