ACCTNG 2400 1st Edition Lecture 6 Outline of Last Lecture II. 4 Basic Financial Statementsa. Balance Sheetb. Statement of Retained Earningsc. Income statementd. Statement of Cash FlowsIII. Order of statement prepIV. Unit of measure assumption and headingOutline of Current Lecture I. AccountsII. Debit and CreditIII. Journal Entries and ledger accounts (summarizing) and T-accountCurrent LectureI. Account – a record of related financial statementsa. Accounts are grouped to summarize financial health and performance on the financial statementsb. Some account titles are common across all companies (cash, accounts payable)c. Others may be used only by that particular company (lawn care equipment)II. Debit and Credit a. Debit (dr)– the left side of an account; can be positive or negativeb. Credit (cr)– the right side of an account (can be positive or negative)c. Accounts increase on the same side as they appear in A = L + SEd. Each side has to be equal! DEBIT = CREDITThese 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.III. Journal – indicate the effects of each day’s transactions in a debits-equal-credits format.- Dollar signs are not used because the journal is supposed to be a record of financial effectsLedger – used to summarize the effects of journal entries on each account; organized by account- By themselves, journal entries show the effects of transactions, but they do not provide account balances, which is why ledger accounts are needed.- T-account – a simplified version of a ledger account used for summarizing the effects of journal
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