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This 3 page Class Notes was uploaded by JillianRing on Monday September 28, 2015. The Class Notes belongs to ACG 2021 at Florida State University taught by Ronald Pierno in Summer 2015. Since its upload, it has received 69 views. For similar materials see Financial Accounting in Accounting at Florida State University.
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Date Created: 09/28/15
Chapter 3 The Accounting Information System Steps in the Recording Process The Journal where each transaction is recorded The Ledger each component of the transaction is posted to the ledger contains the entire group of accounts maintained by a company Posting The Account Debits Left Credits Right Doubleentry Accounting each transaction must affect two or more accounts to keep the accounting equation in balance Debit one account must credit another account Debits Credits Account Name Debit Dr Credit Cr Debit Balance balance rt with a debit 1 with a credit Assets debits increase assets credits decrease assets 0 Assets expenses dividends Credit Balance balance rt with a credit 1 with a debit Liabilities credits increase liabilities debits decrease liabilities Equity credit increase equity debit decrease equity 0 Liabilities equity revenues 0 Revenue Expense accounts are NOT equity accounts I Revenue credits increase accounts debits decrease accounts I Expense debits increase accounts credits decrease accounts I Dividends debits increase account credits decrease account Example IR amp Co pays 1500 in advance for three months of rent Assets 1 500 Pro Rent 1500 Cash Journal Entry Prepaid Rent Cash Ledger Entry Liabilities 1500 1500 ComStk RE debit account first credit account second Prepaid Rent Cash Bal 1500 872 5 1500 Trial Balance total list of all accounts with final debit credit balances 0 All amounts on the trial balances come from the account Account Title Debit Credit Cash 7000 Accounts Receivable 3000 Supplies 3000 Equipment 5000 Bank Loan 5000 Accounts Payable 1000 Common Stock 10000 Service Revenue 7000 Rent Expense 600 SalariesWages Expense 2500 Supplies Expense 1200
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