Chapter F2 Power notes Analyzing Transactions Learning objectives 1. Usefulness of an Account 2 Characteristics of an Account 3. Analyzing and Summarizing Transactions 4. lustration of Analyzing and Summarizing 5. Trial Balance 6. Discovery and Correction of Errors 7. Financial Analysis and Interpretation C2 c2-1
C2 - 1 Learning Objectives 1. Usefulness of an Account 2. Characteristics of an Account 3. Analyzing and Summarizing Transactions 4. Illustration of Analyzing and Summarizing 5. Trial Balance 6. Discovery and Correction of Errors 7. Financial Analysis and Interpretation Power Notes Analyzing Transactions Chapter F2 C2
Chapter F2 Power notes Analyzing Transactions Slide f Power Note Topics 3. Double-Entry Accounting 11. Analyzing and Recording Transactions 36 Chart of Accounts. Trial Balance 40. Journal, Ledger, and Trial Balance 43. Recording and Posting an Entry 50· Correcting Errors 57. Horizontal Analysis Note: To select a topic, type the slide# and press Enter c2-2
C2 - 2 • Double-Entry Accounting • Analyzing and Recording Transactions • Chart of Accounts, Trial Balance • Journal, Ledger, and Trial Balance • Recording and Posting an Entry • Correcting Errors • Horizontal Analysis Slide # Power Note Topics 3 11 36 40 43 50 57 Power Notes Analyzing Transactions Chapter F2 Note: To select a topic, type the slide # and press Enter
Double-Entry Accounting Double-entry accounting is based on a simple concept: each party in a business transaction will receive something and give something in return. In bookkeeping terms, what is received is a debit and what is given is a credit. the t account is a representation of a scale or balance 5 Scale or balance T account eft Side Right Side Receive Give Luca Pacioli DEBIT CREDIT Developer of Double-Entr Receive Give Accounting DEBIT CREDIT c2-3
C2 - 3 Double-Entry Accounting “ Double-entry accounting is based on a simple concept: each party in a business transaction will receive something and give something in return. In bookkeeping terms, what is received is a debit and what is given is a credit. The T account is a representation of a scale or balance.” Luca Pacioli Developer of Double-Entry Accounting Scale or Balance Receive DEBIT Give CREDIT T account Left Side Receive DEBIT Right Side Give CREDIT
Expanded Accounting Equation The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given. DEBITS CREDITS received gIven c2-4
C2 - 4 Expanded Accounting Equation “ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.” DEBITS received CREDITS given =
Expanded Accounting Equation The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given. DEBITS CREDITS received gIven Assets c2-5
C2 - 5 Expanded Accounting Equation “ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.” DEBITS received CREDITS given = Assets
Expanded Accounting Equation The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given. DEBITS CREDITS received gIven Assets Expenses c2-6
C2 - 6 Expanded Accounting Equation “ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.” Assets DEBITS received CREDITS given = Expenses
Expanded Accounting Equation The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given. DEBITS CREDITS received gIven Liabilities Assets Expenses c2-7
C2 - 7 Expanded Accounting Equation “ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.” Expenses Assets DEBITS received CREDITS given = Liabilities
Expanded Accounting Equation The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given. DEBITS CREDITS received gIven Liabilities Assets Owner's Equity Expenses c2-8
C2 - 8 Expanded Accounting Equation “ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.” Expenses Liabilities Assets DEBITS received CREDITS given = Owner’s Equity
Expanded Accounting Equation The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given. DEBITS CREDITS received gIven Liabilities Assets Owner's Equity Expenses Revenues c2-9
C2 - 9 Expanded Accounting Equation “ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.” Expenses Liabilities Owner’s Equity Assets DEBITS received CREDITS given = Revenues
Expanded Accounting Equation The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given. DEBITS CREDITS received gIven Liabilities Assets Owner's Equity Net Income Revenues Expenses c2-10
C2 - 10 Expanded Accounting Equation “ The basic accounting equation can be expanded to include all five financial categories indicating what has been received and given.” Expenses Liabilities Owner’s Equity Assets DEBITS received CREDITS given = Revenues Net Income