1. ACCT 201 ACCT 201 ACCT 201 Accounting Information System Chapter 1 Dr. BALAMURUGAN MUTHURAMAN 12015-2016

2. Operating Environment The Accounting System: A Conceptual Overview Business Entity A Process and Summarize System Outputs: Financial Statements and Reports System Inputs: Measurable Transactions and Events Entity BEntity C Entity DEntity E 22015-2016

3. Preparers ASB Auditors Decision makers GAAP Financial Reporting Environment Financial Statements Audit Report FASB GAAS 32015-2016

4. Management Users Income Statement Balance Sheet Statement of Cash Flows Management Prepares Auditors Basic Mistrust Lends Credibility Independent Auditor 1 2 3 4 G A A P G A A S 42015-2016

5. International Accounting Principles Despite our growing global economy, countries continue to maintain their unique set of acceptable accounting practices. 52015-2016

6. ACCT 201 ACCT 201 ACCT 201 Learning Objective Identify, explain, and apply accounting principles. Conceptual 62015-2016

7. A business is accounted for separately from its owner(s). Financial Statement information is supported by independent, unbiased evidence. A business continues operation instead of being closed or sold. 72015-2016

8. Express transactions and events in monetary units. Financial statements are based on actual costs incurred in business transactions. 82015-2016

9. ACCT 201 ACCT 201 ACCT 201 Accounting Information System Text Section: Transactions, Documents, and Accounts (p. 41) 92015-2016

10. ACCT 201 ACCT 201 ACCT 201 Learning Objective Identify, explain, and apply accounting principles. Conceptual 102015-2016

11. Source documents Recording & posting Trial balance Reporting Transaction or event Analysis The Accounting Process Exh. 2.2 112015-2016

12. External Transactions occur between the organization and an outside party. Internal Transactions occur within the organization. Transactions and Events Exchanges of economic consideration between two parties. 122015-2016

13. Ongoing events in world Recording Data Bank Classifying Information Accounting Information System Boundary 132015-2016

14. ACCT 201 ACCT 201 ACCT 201 Learning Objective Describe source documents and their purpose. C4 Conceptual 142015-2016

15. Source Documents Invoices Other Check Stubs Journal Bank Statement 152015-2016

16. ACCT 201 ACCT 201 ACCT 201 Learning Objective Describe an account and its uses in recording transactions. Conceptual 162015-2016

17. ACCT 201 ACCT 201 ACCT 201 Account A storage unit used to classify and summarize money measurements of business activity of a similar nature. 172015-2016

18. ACCT 201 ACCT 201 ACCT 201 Detailed record of increases and decreases in specific assets, liabilities, equities, revenues, or expenses. ======================= Separate accounts are maintained for each item of importance. The Account 182015-2016

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23. Accts Rec. The General Ledger General Ledger Inventory Cash Notes Pay. Mortgage Accts Pay. Revenue Expenses Retained Earnings 232015-2016

24. ACCT 201 ACCT 201 ACCT 201 242015-2016

25. Account Title Left Side Right Side 252015-2016

26. ACCT 201 ACCT 201 ACCT 201 The Formal Account The Balance Column Ledger 262015-2016

27. Account Title Account No. ### DateItem Post RefDebitCredit Balance DebitCredit 272015-2016

28. AssetsLiabilities Owners’ Equity Capital Stock Retained Earnings ExpensesRevenue =+ Net Income - = The Accounting Equation A = L + OE 282015-2016