会计英语unit 3 Recording Business Transactions Double-Entry System.ppt

Unit 3 Recording Business Transactions: Double-Entry System 1.Recording Business Transactions ①Setup of Account ②T-account 2.Double-Entry System ①The rule of debit and credit ②Activities Ⅰ Recording Business Transactions ①Setup of Account Accounts are the foundation of recording accounting entries and preparing financial statements. The reference number of account is in order to facilitate accounting identification and transaction entry. Balance Sheet 1.Assets 101 Cash 102 Accounts Receivable 103 Notes Receivable 104 Office Supplies 105 Equipment 106 Inventory 107 Prepaid Insurance 108 Land 109 Accumulated Depreciation 110Intangible Assets Income Statement 4.Revenue 401 Sales Revenue 402 Interest Revenue Balance Sheet (Chinese) 1.Assets 1001 Cash 1002 Cash in bank 1121 Notes Receivable 1122 Accounts Receivable 1123 Prepaid expenses 1221 Other receivable 1501 Held-to-maturity investment 1521 Investment Property 1601 Fixed assets 1602 Accumulated Depreciation 1701 Intangible Assets 1702 Amortization 1711 Goodwill Income Statement (Chinese) 6. Profit and loss 6001 Sales Revenue 6011 Interest Revenue 6111 Investment Income 6301 Non-operating Income 6401 Cost Of Sales 6601 Selling Expense 6602 Administrative Expense 6603 Financial Expense 6711 Non-operating expenditure 6801 Income Tax ② T-account Example 1 Cash Example 2 Accounts Payable Ⅱ Double-entry System Each transaction has a dual effect on the equation. Double-entry system is fundamental to record business transactions in which each transaction is recorded by an equal amount in two or more connected accounts. It reflects the capital activities and the cause and effect of changes of capital and operating results. It helps verify entry recording and guarantee the validity of entries. ① The Rule of Debit and Credit Example On November 1, Chris deposits $100,000 in a bank account, the effect of this transaction is both assets and owner’s equity of business