After studying this chapter, you should be able to:
1 Analyze the effect of business transactions on the basic accounting equation.
2 Explain what an account is and how it helps in the recording process.
3 Define debits and credits and explain how they are used to record business transactions.
4 Identify the basic steps in the recording process.
5 Explain what a journal is and how it helps in the recording process.
6 Explain what a ledger is and how it helps in the recording process.
7 Explain what posting is and how it helps in the recording process.
8 Explain the purposes of a trial balance.
9 Classify cash activities as operating, investing, or financing.