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steps in recording business transactionslook at exhibit 5 to observe the steps in recording and posting the effects of a business transaction note
a business may perhaps engage in thousands of transactions during a year an accountant summarizes and classifies the data in these transactions to
q objective of recording business transactions- use the account as the essential classifying and storage unit for accounting information- articulate
q procedure of recording business transactionsthe raw information of accounting is the business transactions we documented the transactions in
q salary potential of accountantsselecting a major represents much additional than the choice of courses a student takes in college to a significant
q equity segment of a corporate balance sheetthe stockholders equity segment of a corporate balance sheet can become more complex as you will see
q corporate accounting and accounting for sole proprietorshipseveral textbook authors use a sole proprietorship and a partnership form of business
accountants and others are able to access the home pages of companies to find their annual reports and other information home pages of cpa firms to
q illustrate a simple accounting systemjames stevens was captivating an accounting course at state university as well he was helping companies find
q dividends paid to ownersstockholders equity is a improved by capital contributed by stockholders and by revenues earned through operations and b
q show transactions affecting the income statementto continue to exist a business must be profitable this signifies that the revenues earned by
q illsutarte the summary of transactionssummary of transactions is a teaching tool utilized to show the effects of transactions on the accounting
q transactions affecting only the balance sheetsince every transaction affecting a business entity must be recorded in the accounting records
q show periodicity conceptas per to the periodicity time periods concept or assumption an entitys life can be meaningfully subdivided into time
q explain about going-concern conceptexcept strong evidence exists to the contrary accountants assume that the business entity will continue
q illustrate exchange-price conceptexchange-price or cost concept principle the majority of the amounts in an accounting system are the objective
q explain about money measurement conceptmoney measurement concept economic activity is primarily recorded and reported in a common financial unit of
q explain accounting entity conceptbusiness entity concept or accounting entity concept data assemble in an accounting system relates to a specific
q prepare a source documenta source document typically supports the evidence of the transaction a source document is any printed or written evidence
q explain about accounting transactionan accounting transaction is a business event or activity that causes a measurable change in the accounting
q what do you mean by equitiesassets were described earlier as the things of value owned by the business or the economic resources of the business
q illustrate the financial accounting processin this section we describe the accounting equation as the framework for the entire accounting process
q explain about financial statementthe income statement is the statement of retained earnings the balance sheet and the statement of cash flows of
q explain about statement of cash flowsretained earnings usually consist of the accumulated net income of the corporation minus dividends distributed
q what do you mean by liabilitiesliabilities are the debts outstanding by a business usually a business should pay its debts by certain dates a