Case Scenario:
Andragon Manufacturing, a small private company, has recently hired you as their accounting department supervisor. You have been told that your role will also include some of the day-to-day accounting. John Edwards, the company's CEO and principal shareholder, has told you during your hiring interview that his strategy is to expand Andragon's operations and that he is seriously thinking about taking the company public in the near future. As such, he has instructed the company's human resources manager to hire several management trainees to expand Andragon's management force.
Problem:
Andragon's CEO, Mr. Edwards, has asked you to schedule a meeting to educate several new hires on how to read and interpret various accounting journals and financial statements. Discuss how you would proceed with explaining what debits and credits signify in a journal and how they are used to signify increases or decreases in assets, liabilities, owner's equity, revenues, and expenses. Help the new trainees understand the process with a hypothetical transaction.