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Financial Accounting > STUDY GUIDE > week 2 accounting system precise and understandable study guide (All)

week 2 accounting system precise and understandable study guide

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For the next two weeks we will be learning the rules of bookkeeping (debits and credits). At a very basic level, all accountants must be able to record business transactions in the proper format that leads to the preparation of those financial statements from week one. Here's a most excellent tutorial from a DeVry professor that introduces the Accounting Information System. Example for Recording Debits and Credits (Links to an external site.) TOPIC D - posted Saturday - final week 2 questions 1) Why must debits equal credits in the journal entries? What's the accounting equation have to do with the answer? 2) Explain what posting means. What is the formula for calculating the ending balances for the accounts in the general ledger? 3) After calculating the ending balances, what's next? How is a trial balance prepared? What do you do if the total of the debit column does not equal the credit column? TOPIC C - posted Thursday Cash is not required in order for a transaction to occur. Check out this tutorial about accrual accounting. Accounts Receivable and Accounts Payable (Links to an external site.) 1) Let's examine accrual accounting. Why not just use the simple cash basis? What are some of the benefits of using accrual accounting? 2) Let's examine the adjusting process. Which accounts need to be adjusted? Why is it important to accomplish these updates? 3 ) Discuss the major principle that describes when revenues should be recorded. Discuss the major principle that describes when expenses should be recorded. 4) Executive Lawn provides $100 of landscape maintenance to Peterson Law on April 10. Consider three scenarios: Peterson pays for the lawn service in advance on March 28. Peterson pays for the lawn service on April 10, the day of service. Peterson pays for the lawn service the following month on May 2. If Executive Lawn uses accrual-basis accounting, on which date would Executive Lawn record the $100 revenue for each scenario? 5) Below are transactions for Bronco Corporation during the month of June. Calculate the amount of expense to recognize in June. If the transaction does not require an expense to be recognized, indicate how the transaction would be reported. Pay $600 cash to employees for

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