UT Knoxville ACCT 200 - Chapter 2 & 9 (17 pages)

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Chapter 2 & 9



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Chapter 2 & 9

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Pages:
17
School:
University of Tennessee
Course:
Acct 200 - Foundations of Accounting
Foundations of Accounting Documents

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1 Basic Accounting Concepts Chapter 2 and Chapter 9 A200 Survey of Accounting University of Tennessee 2 Ch 2 Financial Accounting System Elements Rules 1 Record business transactions based on the eight accounting concepts 2 Record business transactions using Generally Accepted Accounting Principles GAAP Framework 1 Analyze and record business transactions 2 See the integrated financial statement framework slide 3 for recording business transactions Controls 3 Income Statement Net income must equal the net effects of revenues and expenses on the Statement of Retained Earnings 2 Balance Sheet Assets must equal Liabilities plus Equity 3 Statement of Cash Flows Ending cash must equal Cash on the Balance Sheet 3 Integrated Financial Statement Framework for recording business transactions STATEMENT OF CASH FLOWS explains the change in the asset Cash INCOME STATEMENT and STATEMENT OF RETAINED EARNINGS BALANCE SHEET explain the change in the equity Retained Earnings Assets Liabilities Equity A Cash in out from Operating activities Revenues Expenses Net Income Net Loss B Cash in out from Investing activities Dividends C Cash in out from Financing activities Increase or decrease to Retained Earnings Increase or decrease to Cash 4 Ch 2 Business Activity Financing Transaction 1 In January 2012 Kimble Corporation raised 200 000 by issuing capital stock to new owners in exchange for cash STATEMENT OF CASH FLOWS explains the change in the asset Cash INCOME STATEMENT and STATEMENT OF RETAINED EARNINGS BALANCE SHEET explains the change in the equity Retained Earnings 200 000 Cash in Financing Assets Cash 200 000 Liabilities Equity Capital Stock 200 000 This transaction increases both assets and equity 5 Ch 2 Business Activity Financing Transaction 2 In January 2012 Kimble Corporation raised 120 000 by issuing a note payable to First National Bank STATEMENT OF CASH FLOWS explains the change in the asset Cash INCOME STATEMENT and STATEMENT OF RETAINED EARNINGS BALANCE SHEET explains



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