Auditing, taxation, management consulting D. Cost accounting, production scheduling, recruiting 3) Communication of economic events is the part of the accounting process that involves A. identifying economic events. B. preparing accounting reports. C. recording and classifying information. D. quantifying transactions into dollars and cents. 4) The body of theory underlying accounting is not based on A. physical laws of nature. B. principles
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keep the basic accounting equation in balance. In in other words, for each transaction, debits must equal credits. The equality of debits and credits provides the basis for the double-entry system of recording transactions. 4. Erica Mendez, a beginning accounting student, believes debit balances are favorable and credit balances are unfavorable. Is Erica correct? Discuss. Erica is not correct. Debit and credit are two actions that are opposite in nature. A debit balance only means that debit amounts exceed
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transactions during the accounting periods. There are several sequences includes in the accounting cycle such as identifying, collecting and analyzing documents and business transactions, records the process in journals, posting the journalized amounts to ledger, preparing the trial balances and financial statements. Usually, an accounting cycle of the company begins when a business transaction take place and finishes the accounting cycle when the financial statements are prepared. The period of the accounting
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This week I have learned that accounting involves more than recording transactions and balancing accounts. Along with journalizing transactions and adjusting entries, the accounting cycle involves closing entries and preparing a post-closing trial balance. I believe that the most important skills learned in an accounting position is to understand the basic equation of accounting, assets + liabilities + stockholder’s equity. Most accounting goes back to this equation as the basis for balancing accounts
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transactions and recorded as invoices for either suppliers or customers of the company. Once the financial information has been added to the accounting records it is all put together into financial statements to include the following: income statement, balance sheet, statement of cash flows, statement of retained earnings, and any disclosures. Purpose of Financial Reporting Documents, or the financial reports, are gathered in order to keep track of money going in or going out. Essentially, there is a
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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
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F U N A C C O CHAPTER 1 DEFINITION AND NATURE OF ACCOUNTING Accounting – its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions. Stakeholders – all parties who have interest in an entity, whether indirect or direct. Stakeholders are grouped into two, namely: * External Users – groups or individuals who are not directly concerned with the day-to-day operations of the entity
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Accounts payable D) Accounts receivable Which of the following accounts is NOT an example of an owner’s equity account? A) Drawing B) Capital C) Additional investments D) Cash Accountants first record transactions in the: A) chart of accounts. B) trial balance. C) journal. D) ledger. Which of the following accounts is an asset? A) Salary expense B) Accounts payable C) Service revenue D) Prepaid expenses Which of the following accounts is a liability? A) Accounts payable B) Prepaid expenses C) Salary
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CHAPTER STUDY OBJECTIVES 1. Analyze the effect of business transactions on the basic accounting equation. Each business transaction must have a dual effect on the accounting equation. For example, if an individual asset is increased, there must be a corresponding (a) decrease in another asset, or (b) increase in a specific liability, or (c) increase in stockholders’ equity. 2. Explain what an account is and how it helps in the recording process. An account is an individual accounting record of
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Self Assessment Questions 2 6.4 Methods of preparing trial balance: Total Method and Balance Method Self Assessment Questions 3 6.5 Preparation op Trial balance Self Assessment Questions 4 6.6 Errors and their rectification Self Assessment Questions 5 6.7 Errors disclosed by a Trial Balance Self Assessment Questions 6 6.8 Errors not disclosed by Trial Balance Self Assessment Questions 7 6.9 Steps to locate the errors 6.10 Trial Balance and adjustments Self Assessment Questions 8
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