UW-Milwaukee BUSADM 201 - Transaction Analysis (3 pages)

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Transaction Analysis



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Transaction Analysis

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Looking at transaction analysis and learning the basics of what an account is.


Lecture number:
4
Pages:
3
Type:
Lecture Note
School:
University of Wisconsin-Milwaukee
Course:
Busadm 201 - Introduction to Financial Accounting
Edition:
1

Unformatted text preview:

Bus Adm 201 Notes Lecture 4 Outline of Last Lecture I Profitability Ratios II Current Ratio Formula III Debts to Total Assets Ratio Formula IV Free Cash Flow Ratio Outline of Current Lecture Accounting Information System II The four components III Steps in Transaction Analysis A Transaction IV Accounts A Account Implementation Current Lecture Accounting Information System Accounting Transactions Analyzing Transactions Summary of Transactions Steps in the Recording Process The Journal The Ledger Chart of Accounts Posting The recording process illustrated The Account Debits and Credits Debit and Credit Procedures Stockholders Equity relationships Summary of Debit Credit rules 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 The Trial Balance Limitations of a Trial Balance Collects organizes and processes transaction data Transaction is an event that results in a change of a balance sheet item Typically it is an exchange Asset liability stock revenue or expense for one another Steps in transaction Analysis Step 1 Accumulate facts Step 2 Determine effects on accounting equation Note Algebra requires that you keep the equality Transaction Analysis is the process of identifying the specific effects of economic events on the accounting equation Two or more items will always be affected Account is Lowest level of detail in accounting Records increases and decreases for a specific asset liability or stockholders equity item Number of accounts used depends on facts and personal desires of the accountant and management Note it s easier to add up accounts to get a grouped total than it is to split out what has been grouped in a single account Stockholders equity has accounts for Stock Retained Earnings from previous years Also temporary current year only accounts dividends paid in current year Revenues earned in current year Expenses incurred in current year Account



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