survey 5e ch2_lecture
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Chapter 2Chapter 2
Basic Accounting ConceptsBasic Accounting ConceptsBasic Accounting ConceptsBasic Accounting Concepts
Learning ObjectivesLearning ObjectivesAfter studying this chapter, you should be able to… Describe the basic elements of a financial accounting
system. Analyze, record, and summarize transactions for a
corporation’s first period of operations. Prepare financial statements for a corporation’s first
period of operations. Analyze, record, and summarize transactions for a
corporation’s second period of operations. Prepare financial statements for a corporation’s
second period of operations.
Learning Objective 1Learning Objective 1
Describe the basic elements of a financial accounting system
Basic Rules of an Accounting System
• A transaction is an economic event that can affect one, two or more items in the financial statements.
Rules determine:
WHATtransactions
are to be recorded
WHENtransactions
are to be recorded
HOWtransactions
are to be recorded
AMOUNTof the
transaction to be
recorded
Framework of an Accounting System
Assets = Liabilities + EquityAssets = Liabilities + Equity
The Accounting EquationThe Accounting Equation
• By expanding the accounting equation, transactions can be analyzed, summarized, and recorded within the integrated financial statement framework.
Integrated Financial Statement Framework: Template