The Accounting Information System DONALD E.KIESO JERRY J.WEYGANDT TERRY D.WARFIELD IIIII II IT IIT II Intermediate Chapter 3 Accounting Intermediate Accounting 12th Edition Kieso,Weygandt,and Warfield Chapter 3-1
Chapter 3-1 Intermediate Accounting 12th Edition Kieso, Weygandt, and Warfield
Learning Objectives 1.Understand basic accounting terminology. 2.Explain double-entry rules. 3.Identify steps in the accounting cycle. 4.Record transactions in journals,post to ledger accounts, and prepare a trial balance. 5.Explain the reasons for preparing adjusting entries. 6.Prepare financial statement from the adjusted trial balance. 7.Prepare closing entries. 8.Explain how to adjust inventory accounts at year-end. Chapter 3-2
Chapter 3-2
Accounting Information System Accounting Information System The Accounting Cycle Basic terminology ldentification and recording o Debits and credits oJournalizing ●Basic equation o Posting o Financial statements and o Trial balance ownership structure 0 Adjusting entries Adjusted trial balance Preparing financial statements 0 Closing Post-closing trial balance 0 Reversing entries o Financial statements for Chapter merchandisers 3-3
Chapter 3-3
Accounting i Information System An Accounting Information System (AIS) collects and processes transaction data and disseminates the information to interested parties. Chapter 3-4
Chapter 3-4 collects and processes transaction data and disseminates the information to interested parties. An Accounting Information System (AIS)
Accounting Information System Helps management answer such questions as: How much and what kind of debt is outstanding? Were sales higher this period than last? What assets do we have? What were our cash inflows and outflows? 0 Did we make a profit last period? Chapter 3-5 LO 1 Identify the major financial statements and other means of financial reporting
Chapter 3-5 How much and what kind of debt is outstanding? Were sales higher this period than last? What assets do we have? What were our cash inflows and outflows? Did we make a profit last period? Helps management answer such questions as:
Basic Terminology Event Journal Transaction Posting Account Trial Balance o Real Account ·Adjusting Entries 0 Nominal Account Financial Statements Ledger Closing Entries Chapter 3-6 LO 1 Understand basic accounting terminology
Chapter 3-6
Debits and Credits An Account shows the effect of transactions on a given asset,liability,equity,revenue,or expense account. Double-entry accounting system (two-sided effect). Recording done by debiting at least one account and crediting another. DEBITS must equal CREDITS Chapter 3-7 LO 2 Explain double-entry rules
Chapter 3-7 An shows the effect of transactions on a given asset, liability, equity, revenue, or expense account. accounting system (two-sided effect). Recording done by debiting at least one account and crediting another. DEBITS CREDITS
Debits and Credits An arrangement that shows Account the effect of transactions on an account. ●Debit="Left" ●Credit="Right" An Account can Account Name be illustrated in a Debit Dr. Credit Cr. T-Account form. Chapter 3-8 LO 2 Explain double-entry rules
Chapter 3-8 Account Name Debit / Dr. Credit / Cr. An arrangement that shows the effect of transactions on an account. Debit = “Left” Credit = “Right
Debits and Credits If Debit entries are greater than Credit entries, the account will have a debit balance. Account Name Debit Dr. Credit/Cr. Transaction #1 $10,000 $3,000 Transaction #2 Transaction #3 8,000 Balance $15.000 Chapter 3-9 LO 2 Explain double-entry rules
Chapter 3-9 Account Name Debit / Dr. Credit / Cr. If Debit entries are Credit entries, the account will have a debit balance. $10,000 $3,000 Transaction #2 Transaction #3 8,000 Balance Transaction #1
Debits and Credits If Credit entries are greater than Debit entries, the account will have a credit balance. Account Name Debit Dr. Credit Cr. Transaction #1 $10,000 $3,000 Transaction #2 8,000 Transaction #3 Balance $1.000 Chapter 3-10 LO 2 Explain double-entry rules
Chapter 3-10 Account Name Debit / Dr. Credit / Cr. If Credit entries are Debit entries, the account will have a credit balance. $10,000 $3,000 Transaction #2 8,000 Transaction #3 Balance Transaction #1