ACCT 221 1st Edition Lecture 2Outline of Last Lecture I. Class Introduction II. What is AccountingIII. The Basic Accounting EquationOutline of Current Lecture II. TransactionsIII. Financial Statements Current Lecture Transactionso 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 $100o 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 Statement2. Statement of Changes in Stockholders Equity 3. The Balance Sheet4. 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 askedThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a
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