Analyzing

1
Analyzing Recording Business Transactions

• Chapter 2

2
Source documents

• Identify and describe transactions and events
  entering the accounting process.

3
Account

• Is a record of increases and decreases in a
  specific asset, liability, equity, revenue or
  expense
• Ledger
• Is a record containing all accounts used by a
  company

4
Assets

• Cash
• Accounts receivable
• What customers owe us
• Note receivable
• Prepaid Accounts
• Supplies
• Equipment

5
Liabilities

• Accounts payable
• Money owed to suppliers
• Notes payable
• Unearned revenue
• Deposits from customers

6
Equity

• Common Stock
• Shareholders investment in the business
• Dividends
• Distributions of income to shareholders
• Retained Earnings

7
Chart of Accounts

• List of an accounts a company uses and includes
  an idea.
• 101-199 Assets
• 201-299 Liabilities
• 301-399 Equity
• 401-499 Revenues
• 501-599 Expenses

8
T- Accounts
Debit
Credit
Right side
Left side
9
Accounting Equation

Liabilities
Assets

Equity
DR
DR
CR
DR
CR
CR
?
?
?
?
?
?
Double entry accounting each transactions
affect, And recorded in, at least two
accounts Debits Credits
10
Journal

• Journal
• Gives a complete record of each transaction in
  one place

• Journalizing
• Process of recording transactions
• Posting
• Process of transferring journal entry info to the
  ledger

11
Journal
Date Account PR Debit Credit




12
Journal Entries

• Go to excel worksheet

13
Transactions

• Shareholder invests in the business 30,000 in
  cash
• Co pays 2,500 cash for supplies
• Co pays 26,000 cash for equipment
• Co purchases 7,100 of supplies on account ( on
  credit)
• Co provides consulting services and collects
  4,200 cash

14
Transactions

• Co pays for 1,000 cash for rent
• Co pays 700 cash for salaries
• Co provides consulting services of 1,600 and
  bills the customer
• Co receives 1,600 cash from the client billed
• Co pays 900 on account
• Co pays dividends 1,000

15
Transactions

• Co receives 3,000 cash in advance
• Co pays 2,400 cash for insurance for one year

16
Posting to the ledger

• Record the transactions into ledger by account
  name
• Prepare a TRIAL BALANCE
• List of accounts and balances