ACCT 221 1st Edition Lecture 2 Outline of Last Lecture I Class Introduction II What is Accounting III The Basic Accounting Equation Outline of Current Lecture II Transactions III Financial Statements Current Lecture Transactions o In accounting we report entities by recording transactions of our business Ex Purchased 100 worth of office supplies For this transaction we would record to two accounts cash and supplies The Cash account would be credited decreased by 100 The Supplies account would then be debited increased by 100 o Important things to remember You will always deal with at least 2 accounts per transaction Before and after a transaction the accounting equation must still remain equal as it should at all times You will learn to know whether an account is increased by a debit or a credit because not every accounts balance will increase when debited THE FOUR FINACIAL STATEMENTS 1 The Income Statement 2 Statement of Changes in Stockholders Equity 3 The Balance Sheet 4 The Statement of Cash Flows Make sure you know these statements and how to do them because you will be quizzed on this material during you discussion The following page guides you on how to complete the financial statements Follow the arrows to make sure you use the correct numbers when asked These 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
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