PRINCIPLES OF ACCOUNTING

The following learning objectives for this chapter map to the curriculum design for our online university-level courses. These courses are offered through Utah State University, and result in the awarding of up to 6 hours of highly transferrable college credit. To learn more, check out the classroom link.

Accounts, debits and credits.

 Understand the concept of an account.

 Know that every transaction can be described in "debit-credit" form, and that debits must equal credits!

 Be aware of the reasons that accountants use debits and credits, rather than pluses and minuses.

 Know the six types of accounts (e.g., assets), and the related debit/credit rules.

 Note the importance of transaction analysis and source documents.

 Understand why credits are sometimes misunderstood.

The journal.

 Know that the journal is the book of original entry, into which transactions are journalized in chronological order.

 Be able to distinguish between a journal and ledger.

 Be aware of the reasons why some companies may employ special journals, in addition the general journal.

 Know that why a ledger is needed, in addition to a journal.

The general ledger.

 Understand the need for accounts, and recognize that a collection of accounts comprises the general ledger.

 Be able to construct and "operate" a running balance form of account.

 Understand the need and application of posting.

 Be able to describe the steps by which information form source documents is transferred to the ledger.

The trial balance.

 What is the purpose of a trial balance?

 Outline the accounting steps that lead to the preparation of a trial balance.

 If a trial balance is in balance, is it necessarily correct?

 Know how a trail balance can be used to facilitate preparation of financial statements.

 Will a trial balance necessarily produce correct financial statements?

 Be able to explain what a chart of accounts is and how it is used.

 Describe the nature and purpose of control and subsidiary accounts.

Computerized processing systems.

 Appreciate the benefits of a computerized accounting systems.

 Describe typical data entry processes for computerized accounting systems.

 What are some of the typical features of a computerized accounting system?

T-Accounts.

 Know what a T-account is and how it can be used.

 Be able to prepare a T-account that corresponds to a general ledger account.

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