...terms of debits and credits. Since a debit in one account will be offset by a credit in another account, the sum of all debits must therefore be exactly equal to the sum of all credits. The double-entry system of bookkeeping or accounting makes it easier to accurately prepare financial statements directly from the books of account and detect errors. For example: A company borrows a loan from the bank for 10,000 You would debit cash for 10,000 and credit accounts payable for 10,000 2.) This is very important ... Analyzing and recording (or journalize) a transaction is the first tab for you to complete in your Course Project. It is also the first two steps of the Accounting Cycle. It also gets test time. SO POSTING TO THIS THREAD ... give me THREE of your OWN examples of business transactions, with dollar amounts .... state the transaction that occured and then show me in Journal Entry Form, how you would record each of the three transactions. Mar. 27 received $600 cash from services performed from John and Sons Auto body shop Mar. 30 John and Sons purchased equipment for $800 from Dodge dealer ship. Mar. 31John and Sons borrowed $6000 by signing a note. Date | Description of Accounts | Debits | Credits | Mar. 27 | Cash | $600 | | | Service Revenue | | $600 | Mar. 30 | Equipment | $800 | | | Cash | | $800 | Mar. 31 | Cash | $6000 | | | Notes Payable | | $6000 | 3.) Preparing a Trial Balance Cash | Debit | Credit...
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...Today’s modern accounting systems implement basic accounting needs while at the same time offering increased correctness in tracking trends, enabling partnership, and giving quick access to data. Computers run everything from home to work. Computerized solutions offer faster transaction processing and better classification of data while at the same time growing the range of input data that give a clearer and more complete picture of a company’s financial bottom line. Modern accounting systems help company management choose wisely in the use of better resources to increase profits at the same time as identifying cost saving and less spending. Accounting is the foundation of any business big or small. Yesterday many businesses did their accounting by hand. This was a long and problematic job done by those who were trained to do only accounting. Some small businesses still do it today, and this serves them fine. Larger companies have switched to computerized accounting systems today which run faster and are more accurate than manually. They both perform essentially the same thing, and are under the very same principles and concepts with the only differences being in the mechanics (Shanker, 2011). There are many factors facing manual accounting compared to computerized accounting today: speed, cost, and back up. Speed is important in accounting today due to the large companies and their investors. Using today’s computerized accounting systems, processing data, and reports...
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...Bookkeeping and Accounts (City & Guilds Level 2) Course Content: At the end of the course candidates should be able to to do the following at Level 2: * Ledger Accounting: Post ledger transactions, total and balance accounts, bringing down balances: sales ledger; purchase ledger; general ledger. * Control Accounts: Prepare and reconcile control accounts with individual ledger account balances in subsidiary ledgers for: sales ledger control account; purchase ledger control account. * Correction of errors: Identify different types of errors in ledger accounts: incorrect double entries, missing entries, numerical inconsistencies, incorrect calculations. Make appropriate adjustments in the Journal and the respective ledger accounts. Create and clear a suspense account where necessary. * Accounting for capital expenditure and depreciation: Distinguish between capital and revenue expenditure; Record depreciation using: straight line method, reducing balance method. Prepare accounts for depreciation and provision for depreciation. * Year end adjustments: Write off bad debts; Create and increase/reduce the provision for doubtful debts account; Account for accruals and prepayments in ledger accounts; Make appropriate adjustments in the journal; Prepare a trial balance from cash book and ledger balances; Prepare a revised trial balance from one initially drafted incorrectly. * Extended trial balance: Complete an extended trial balance making adjustments...
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...example of an asset account is the company's furniture and fixtures, usually listed as one item since it would be impractical to list every desk and chair. Each account, usually abbreviated а/с, frequently has its own page in the organization's ledger. Double-entry: A method of bookkeeping in which the twofold effect of every entry is recorded, thus requiring two entries to record each transaction. By recording both effects of each transaction, this system offers protection against error. Single-entry: Any bookkeeping system that does not include the complete results of each transaction. It is usually used by small companies or to keep track of specific accounts: for example, a checkbook which only keeps a record of the cash balance. Debit: An amount entered on the left-hand side of an account. Asset and expense accounts...
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...Andrew Dang ACTG440 Case 3 1. a. The auditor would have identified the defalcation through review of operational procedures. By reviewing the operational procedures, he/she would have noticed that there was no segregation of duties when it came to receiving and recording the income earned. b. The auditor would have most likely detected the defalcation when confirming accounts receivable with a large statistical sample. He/she probably would have performed a cash trace and noticed the receipts not matching up with accounts receivable postings. c. A control procedure that would have been effective in preventing this defalcation is having segregation of duties. By having another employee record the income earned from the city’s pension fund, the treasurer would not have been able to divert any of the funds for himself. 2. a) The auditor would have identified the risk that led to billing schemes through analysis of financial results. b) The defalcation most likely would have been detected by the auditor when going through the financial statements and identifying the fluctuation in sales. He/she would probably verify that the vendor was real and noticed the defalcation. c) A control procedure that would have been effective in preventing or detecting this defalcation is to implement authorization controls on approval of purchase orders. Authorization of purchase orders would include detective controls such as investigating orders to see...
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...Nicole L. Lee HSM/260 September 20, 2013 Arin Norris Checkpoint: Definition Scavenger Hunt GAAP- Generally accepted accounting principles- refer to the standard framework of guidelines for financial accounting used in any giving jurisdiction. 2. generally known as accounting standards or standard accounting practice. (Wikipedia) Basic - forming or relating to the most important part of something. 2. forming or relating to the first or easiest part of something not including anything extra (Merriam-Webster.com/dictionary) accounting - the skill, system, or job of keeping the financial records of a business or person (Merriam-Webster.com/dictionary) formula - a plan or method for doing, making, or achieving something. 2. a list of the ingredients used for making something 3. mathematics: a general fact or rule expressed in letters and symbols (Merriam-Webste.com/dictionary) Transaction - The act of transaction or the fact of being transacted. 2. Something transacted, especially a business agreement or exchange. 3. Communication involving two or more people that affects all those involved. (www.thefreedictionary.com) account - A narrative or record of events. 2. a reason given for a particular action or event. 3. a formal banking, brokerage, or business relationship established to provide dealings, and other financial transactions. 4. Worth, standing, or importance. 5. profit or advantage. (www.thefreedictionary.com) General - involving, applicable to...
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...AGE OF RECORD KEEPING The objective of record keeping was at maintaining integrity and discovering misappropriation. Some of the most ancient records are on clay tablets. In accounting history, in Mesopotamia, it was indicate considerable attachment to written record keeping. When an Egypt papyrus was introduced, it was easily handled and stored. Records were important as they reminded owners of the quantities of stores held and enabled owners to control the activities of their stewards. A steward’s local powers were considerable. Stewards might understate the natural increase of livestock, or make good any trading losses from money accumulated, holding back surpluses and so on. From the mid-fourteenth century, written accounts and knowledge of standard level of achievement became more widespread and, as a consequence, the control of the steward became less direct (Noke 1991). Written forms of accounting became more common and accounting became increasingly reliant on documentation rather than ceremonial oath-taking. But, there was a problem in using the Roman numerals. Edwards (1981, p. 47) observes that the use of Arabic numerals was resisted on the ground that they could be more easily changed for fraudulent purposes. Thompson argues, more robust and public, and therefore better suited to larger firms continuously engaged in shipping ventures. The oral testimony from trusted family servants, though useful to report regular domestic transactions...
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...Discussion 1: “Debits and Credits.” Students will respond to the following: o Maria Alvarez, a beginning accounting student, believes debit balances are favorable and credit balances are unfavorable. Upon what does Maria make this assumption? If you choose one over the other, what is your rationale? It depends on Maria Alvarez perspective. For explaining the rationale of this introduction, I would like to explain the meaning of debit and credit first. As stated Chapter 2 (Weygandt&Kimmel&Kieso, 2010, P.49) the terms debit and credit are directional signals and entering an amount on the left side of an account is called debiting the account, making an entry on the right side is crediting the amount. We also record increases in cash as debit and decreases as credit. From this perspective debit balances are good and credit balances are bad. It means Maria`s assumption is correct. But in reality this is not correct because Maria is looking only the left side of the ------------------------------------------------- You must Login to view the entire essay. If you are not a member yet, Sign Up for free! accounting equation which is “Assets” side. And “Cash” is under the “Assets”. For this reason any increase at the “Assets” side records as “Debit” and any decrease at the “Assests” side records as “Credit”. At the other side of the Accounting Equation there are “liabilities” and “Stockholders` Equity” and for this side (right side) of the equation above assumption is...
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...prepared. (9) Closing entries and journalized and posted to the leger. (10) A post-closing trial balance is prepared.” (Warren, Reeve, & Duchac (2012) pg. 162) The accounting cycle begins with analyzing and recording transactions. The bookkeeper, for example, would review the invoices, purchase orders, bank statements, etc. After the transactions have been analyzed they are now ready to be posted to the journal using the double-entry accounting system. The double-entry accounting system means that the transactions are recorded in at least two or more accounts so that the debits and credits equal. After the transactions are recorded in the journal they are now ready to be posted to the ledger. A ledger is a book which contains the businesses individual accounts in it. Posting is simply transferring the data from the journal to the proper accounts in the ledger. To verify all the debits and credits equal after posting, an unadjusted trial balance is prepared. This is a list of all...
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...A C C O U N TA N C Y HIGHER SECONDARY – FIRST YEAR Untouchability is a Sin Untouchability is a Crime Untouchability is Inhuman. TAMILNADU TEXTBOOK CORPORATION College Road, Chennai - 600 006. © Government of Tamilnadu First Edition - 2004 PREFACE CHAIRPERSON Dr. (Mrs) R. AMUTHA Reader in Commerce Justice Basheer Ahmed Sayeed College for Women Chennai - 600 018. REVIEWERS Dr. K. GOVINDARAJAN Reader in Commerce Annamalai University Annamalai Nagar - 608002. Dr. M. SHANMUGAM Reader in Commerce SIVET College Gowrivakkam,Chennai-601302. The book on Accountancy has been written strictly in accordance with the new syllabus framed by the Government of Tamil Nadu. As curriculum renewal is a continuous process, Accountancy curriculum has undergone various types of changes from time to time in accordance with the changing needs of the society. The present effort of reframing and updating the curriculum in Accountancy at the Higher Secondary level is an exercise based on the feed back from the users. This prescribed text book serves as a foundation for the basic principles of Accountancy. By introducing the subject at the higher secondary level, great care has been taken to emphasize on minute details to enable the students to grasp the concepts with ease. The vocabulary and terminology used in the text book is in accordance with the comprehension and maturity level of the students. This text would serve as a foot stool while they pursue their higher studies. Since...
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...Huffman Trucking August 24, 2009 Huffman trucking Introduction The trial balance can be prepared at any point in time which lists all ledger account and the balances are used to provide the equality of debits and credits. Assets are listed first followed by liabilities and then owner’s equity. The trial balance proves that the accounts balance, but does not ensure that all transactions were entered or entered in the proper accounts. At Huffman Trucking we have decided to integrate an automated accounting information system (AIS) using internal controls to ensure the correct data and information reach the right departments in a timely manner. We will explore the importunateness of the AIS internal control and how they are different from a non-automated system. Integration of the automated AIS When it comes to the trial balance, companies can find at the end of the accounting cycle the trial balance has many errors. We would like to introduce the trial balance that is completely automated and could alert the company if any errors were to occur at any given time. We should have a system set up to remind the accounting department to check the trial balance for errors on a weekly basis. As stated by Netmba.com (2007), “The more often the trial balance is calculated during the accounting cycle, the easier it is to isolate any errors; more frequent trial balance calculation narrow the time frame in which the error might have occurred, resulting in few transactions through which...
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...ACCOUNTING CYCLE The Series of business transactions which occur from the beginning of an accounting period to the end of an accounting period is referred any specific period of time for which a summary of business’s transaction is prepared. Steps in Accounting Cycle:1. 2. 3. Journalizing (Recording) Posting to Ledger (Classifying) Final Account (Summarizing) Now Explain Steps:1 Recording:- This is the basic function of accounting. All business transaction, as evidenced by some documents such as Sale bill, Pass book, Salary Slip ect are recorded in the books of account. This is called recording process. 2. Classifying:- All entries in the Journal or books of Original Entry should be posted to the appropriate ledger accounts to find out at a glance the total effect of all such transactions in a particular account. 3. Summarizing:- It is concerned with the preparation and presentation of the classified data in a manner useful to the Internal a well as the external users of financial statements. This process leads to the preparation of the following financial statements:a) Trial Balance b) Profit & Loss Account c) Balance Sheet d) Cash flow Statement. DIFF. BETWEEN BOOK KEEPING AND ACCOUNTING BOOK KEEPING ACCOUNTING 1. It is a Process concerned with recording of transaction. 2. It is the basic of accounting. 1. It is a process concerned with Summarizing of the recorded transaction. 2. It is the basic for business language. for accounting are 3. Person responsible...
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...Double-Entry Bookkeeping” Accounting has played an important role in the evolution of civilization, even before the modern concept of ‘accounting’, as understood by modern man, existed. Man’s drive to measure and record his surroundings required more and more complex means in order to do so (Gleeson-White 11). This drive to more complex recording techniques led to writing, a numeric system, the spread of arithmetic, and created a standard system in an effort to ease international trade. The scope of this paper will focus on the realization of double-entry bookkeeping, a major branch of accounting. Double-entry bookkeeping (DEB) is defined as an accounting system that recognizes both sides of a transaction using equal amounts of debits and credits. Unlike a single-entry system, it tells the whole story of a transaction (Gleeson-White 11). In order to understand how DEB came into existence, one must reflect on history. As stated earlier, man’s natural drive to measure and record events around him led to arguably one of the biggest single leaps in human civilization - writing. Professor Denise Schmandt-Besserat discovered this link between writing and accounting in 1969. Schmandt-Besserat asserts this about her discovery: “the origin of writing is no longer a mystery…contrary to all expectations [no one would have] guessed that writing derived from counting” (Gleeson-White 10). Schmandt-Besserat was researching small, three-dimensional clay figures of varying geometric...
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...The relationship between assets, liabilities and owner’s equity is highlighted by the accounting equation. Assets=liabilities + owner’s equity A=L+OE Chapter2 What’s double entry bookkeeping？ 什么是复式记账法？ P18 Processing transactions in accounting is done by what is called double entry recording. A+E=L+OE+R Debits=credits A=assets E=expenses L=liabilities OE=owner’s equity R=revenue What’s debits and credits? 什么是存储卡和信用卡？ Debits (left-side entries) increase assets and decrease liabilities and equities. Credits (right-side entries) increase liabilities and equities and decrease assets. The debit(DR) and the credit (CR) rules are as follow：P19 Accounting element on which side is an increase recorded? On which side is a decrease recorded? | Assets Debit side Credit side Expense Debit side Credit side Liabilities Credit side Debit side Owner’s equity Credit side Debit side Revenue Credit side Debit side | Chapter3 What’s financial performance? 什么是损益表？P36 The purpose of the Statement of financial performance is to measure and report how much profits (wealth) the business has generated over a period. 表格的基本格式 P36 What’s depreciation? 什么是折旧？ Depreciation is the annual allocation...
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...Over the last 500 years, the double-entry system of accounting has provided the accounting profession with a reliable and accurate way of tracking the economic events of companies. However, with the implementation of computer-based accounting systems over the last few decades, event based accounting has gained popularity. The theory behind event based accounting is that each business transaction can be broken down into one, or a combination of three types of events: economic, business, and information. An economic event is one in which the quantity of resources change, such as selling an item or purchasing a service. Events like receiving an invoice from a supplier, or sending out a purchase order to a vendor are examples of business events. They are necessary to the company even though they are not the monetary or physical transactions for goods or services. Tasks like creating reports and inputting new customers are considered information events. Information events provide the necessary data for the economic or business events that transpire. The double-entry system of accounting focuses on taking those separate events and aggregating them into journal entries. By aggregating them, a great deal of the total information of the event is left out. Under an event based accounting system each event is recorded with as much of the information as possible, and then stored in tables of data that allow the user to recall and compile this information into usable reports. This...
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