Acct 230 1st Edition Lecture 7 Outline of Last Lecture II The Accounting Information System a Measuring Business Activities Outline of Current Lecture III The Accounting Information System a Debits Credits Current Lecture II The Accounting Information System a Debits Credits i Assess Whether the Impact of External Transactions Results in a Debit or Credit to an Account Balance 1 Is there an increase or decrease in the first account involved in the transaction Should I record that increase or decrease with a debit or a credit 2 Is there an increase or decrease in the second account involved in the transaction Should I record that increase or decrease with a debit or a credit 3 Do total debits equal total credits ii Post Transactions to T accounts in the General Ledger 1 The process of transferring the debit and credit information from the journal to individual accounts in the general ledger is called posting 2 A T account is a simplified form of a general ledger account with space at the top for the account title and two sides for recording debits and credits iii Prepare a Trial Balance 1 A trial balance is a list of all accounts and their balances at a particular date showing that total debits equal total credits 2 Another purpose of the trial balance is to assist us in preparing adjusting entries for internal transactions 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 3 It is not a published financial statement to be used by external parties there is no required order for listing accounts in the trial balance 4 The trial balance is used for internal purposes only and provides a check on the equality of the debits and credits
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