Horngren IFA 11e Ch03
Introduction to Financial
Accounting
Horngren | Sundem | Elliott | Philbrick
Recording Transactions
11e
Chapter 3
Learning Objectives
Use double-entry accounting
2. Describe the five steps in the recording process
3. Analyze and journalize transactions and post journal entries to the ledgers
4. Prepare and use a trial balance
1.
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
3-2
Learning Objectives
Close revenue and expense accounts and update retained earnings 6. Correct erroneous journal entries and describe how errors affect accounts 7. Explain how computers have transformed the processing of accounting data
5.
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
3-3
Learning Objective 1
Use Double-Entry Accounting
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
The Double-Entry
Accounting System
LO-1
Method followed for recording transactions, whereby every transaction affects at least two accounts
Accountants analyze each transaction to determine:
Which accounts it affects
Whether to increase or decrease the balances How much each balance will change
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
3-5
The Double-Entry
Accounting System
LO-1
Transactions are recorded in:
General Journal: Chronological record of an organization’s transactions and how each transaction affects the balances in particular accounts
General Ledger: Collection of all ledger accounts that supports an organization’s financial statements
Ledger account: Listing of all the increases and decreases in a particular account Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
3-6
General Ledger: TAccount
Device used to portray individual ledger accounts in the general ledger Each T-account takes the form of the capital letter T and represents an individual ledger account
Transactions affecting a particular ledger account are accumulated
here
Accounting
Horngren | Sundem | Elliott | Philbrick
Recording Transactions
11e
Chapter 3
Learning Objectives
Use double-entry accounting
2. Describe the five steps in the recording process
3. Analyze and journalize transactions and post journal entries to the ledgers
4. Prepare and use a trial balance
1.
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
3-2
Learning Objectives
Close revenue and expense accounts and update retained earnings 6. Correct erroneous journal entries and describe how errors affect accounts 7. Explain how computers have transformed the processing of accounting data
5.
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
3-3
Learning Objective 1
Use Double-Entry Accounting
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
The Double-Entry
Accounting System
LO-1
Method followed for recording transactions, whereby every transaction affects at least two accounts
Accountants analyze each transaction to determine:
Which accounts it affects
Whether to increase or decrease the balances How much each balance will change
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
3-5
The Double-Entry
Accounting System
LO-1
Transactions are recorded in:
General Journal: Chronological record of an organization’s transactions and how each transaction affects the balances in particular accounts
General Ledger: Collection of all ledger accounts that supports an organization’s financial statements
Ledger account: Listing of all the increases and decreases in a particular account Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall.
3-6
General Ledger: TAccount
Device used to portray individual ledger accounts in the general ledger Each T-account takes the form of the capital letter T and represents an individual ledger account
Transactions affecting a particular ledger account are accumulated
here