Overview

In this topic we review the mechanics of accounting. Below are the four basic steps of the accounting system. The integrity of the information in the annual report is dependent on how accurate the system is maintained. Each step in the process has checks and balances which help ensure the trustworthiness of the system.

Module Content

Module 3.1 Accounting Equation

Before we can post transactions into the accounting system we must first understand how they relate to the accounting equation. In this module we expand the accounting equation and practice analyzing transactions.

• ACCTEQUATIONsolution.xls
• ACCTEQUATIONworksheet.xls

Lecture Material

Accounting Equation  
     Transcript | PDF Slides

 

Module 3.2 Accounting Transactions

We are finally to the concept of debits and credits. The T-account is also introduced in this module and we see the accounting equation depicted in slide 4 as T-accounts.

Lecture Material

Accounting Transactions
     Transcript | PDF Slides
 

Module 3.3 Recording Process

In module three we learn the steps of the recording process. It is in this module we begin to use journal entries to post those transactions to the T-accounts or ledgers. This is the meat of the accounting system.

• Chartofaccounts.doc
• Completerecordproc.doc

Lecture Material

Recording Process 
     Transcript | PDF Slides

 

Module 3.4 Trial Balance

This module takes us to the next step which preparation of the trial balance

Lecture Material

Trial Balance
     Transcript | PDF Slides

 

Module 3.5 Accrual Accounting

This next module has to do with understanding the basic principles of revenue recognition and matching related expenses to that revenue.

Lecture Material

Accrual Accounting
     Transcript | PDF Slides

 

Next Week of Module 3

Module 3.6 Adjusting Journal Ethics

This next module is a difficult concept for some to grasp. So you may want to take extra time to do this module. Essentially adjusting entries are just what the words suggest. These are entries made at the end of the reporting cycle. These entries are the result of following the revenue recognition principle and the matching principle

Lecture Material

Adjusting Journal Ethics
     Transcript | PDF Slides

Module 3.7 Adjusted Trial Balance

This module discusses the adjusted trial balance

Lecture Material

Adjusting Trial Balance
     Transcript | PDF Slides

Module 3.8 Preparing Financial Statements

In module 3.8 we discuss the preparation of the financial statements

Lecture Material

Preparing Financial Statements
     Transcript | PDF Slides

Module 3.9 Closing Entries

This module discusses closing entries and the two main types of accounts.

Lecture Material

Closing Entries
     Transcript | PDF Slides

Module 3.10 Post Closing Trial Balance

Well we are finally at the end of the accounting cycle. The last step is the Post closing trial balance.

Lecture Material

Post Closing Trial Balance
     Transcript | PDF Slides