Additional Facts About Accounting System

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Additional Facts About Accounting System


Lecture number:
3
Pages:
2
Type:
Lecture Note
School:
Miami University, Oxford
Course:
Acc 221 - Intro to Financial Accounting
Edition:
1
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Unformatted text preview:

Lecture 3 Outline of Previous Lecture  Chapter 2: Getting to know the Accounting System  Accounting System o Accounting system reporting o Staying in balance o Common Stock o General Journal Outline of Current Lecture  Chapters 1 & 2: Additional Facts About Accounting System  Accounting System o Traditional accounting system routine o Asset, Liability, Owner’s Equity Accounts  Additional Facts o Entries don’t have to affect different sides to stay in balance o No set accounting periods Current Lecture  Chapters 1 & 2: Additional Facts About Accounting System  Accounting System o All entries must follow the traditional accounting system routine:  General Journal  General Ledger  Trial Balance  Balance Sheet o Asset Accounts include:  Cash  Inventory  Equipment o Liability Accounts include:  Notes Payable– Non-owner’s claim to assets o Owner’s Equity accounts include:  Common Stock  Additional Facts: o Entries do not have to affect both sides of the accounting equation (Assets & Liabilities + Owner’s equity) in order to remain in balance  When buying inventory or equipment, transaction only affects the Assets. This is because we are removing (crediting) the cash of our assets, in order to add (Debiting) additional inventory or equipment. ACC 221 1st Edition



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