Chapter 2 Notes

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Scotia Bank

creat de Melisa Basic

Learning the Fundamentals of Federal Income Taxes

creat de Carmen Haas

Ana Izza Accounting

creat de Ana Izza Gonzalez

asheerah Ghoorun

creat de ASHEERAH GHOORUN

Transaction Processing in the AIS

Human judgement

IT

assist in posting and utilizing human judgement

essential in accounting cycle

design source documents

make estimates

recognize transaction and record them correctly

internal controls

transaction liimits

numbering of source documents

IT controls

audits

authorization and permissions

Accounting cycle

End of the year

closing entries

items on income statement; nominal accounts

balances to retained earnings

Adjusting entries

estimates

depreciation and bad debt

deferrals

cash first service second

accurals

service first cash second

adjusting entries, adjusted trial balance, financial statements, closing entries and post closing trial balance

prepare financial statements

Record transactions in the AIS

measure dollar amounts

Identify recordable transactions

throughout fiscal year

Obtain, analyze, and record entries to post to ledger and prepare a trial balance

Coding Systems

mnemonic

memory aid; texting language or short hand.

hierarchical

related to block encoding, but with more numbers; more complex

block

charts of accounts; 1=current assets, 2=long term assets, etc

sequencial

checks, invoices purchase orders

numbers in order

Financial statements

cash flows

cash only; period of time

changes in equity

income statement

period of time

balance sheet

point in time

Accounting and bookkeeping

Bookkeeping

part of accounting

Identifying and measuring

Accounting

Informed Judgements and Decisions

Identifying, measuring and communicating