Analyzing and Recording
Transactions
Chapter 2
Wild, Kwok, Venkatesh and Shaw
Fundamental Accounting Principles
3rd Edition
Copyright ©2022 McGraw Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
, Chapter 2 Learning Objectives
CONCEPTUAL
C1 Explain the steps in processing transactions and the role of source documents.
C2 Describe an account and its use in recording transactions.
C3 Describe a ledger and a chart of accounts.
C4 Define debits and credits and explain double-entry accounting.
ANALYTICAL
A1 Analyze the impact of transactions on accounts and financial statements.
A2 Compute the debt ratio and describe its use in analyzing financial condition.
PROCEDURAL
P1 Record transactions in a journal and post entries to a ledger.
P2 Prepare and explain the use of a trial balance.
P3 Prepare financial statements from business transactions.
© McGraw Hill 2
© McGraw-Hill Education.
, Learning Objective C1
Explain the steps in processing
transactions and the role of
source documents.
© McGraw Hill 3
, Basics of Financial Statements
Business transactions and events are the starting points of
financial statements. Process from transactions to financial
statements is as follows:
• Identify each transaction and event from source documents.
• Analyze each transaction and event using the accounting
equation.
• Record relevant transactions and events in a journal.
• Post journal information to ledger accounts.
• Prepare and analyze the trial balance and financial
statements.
© McGraw Hill 4
Learning Objective C1: Explain the steps in processing transactions and the role of source documents.
Transactions
Chapter 2
Wild, Kwok, Venkatesh and Shaw
Fundamental Accounting Principles
3rd Edition
Copyright ©2022 McGraw Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
, Chapter 2 Learning Objectives
CONCEPTUAL
C1 Explain the steps in processing transactions and the role of source documents.
C2 Describe an account and its use in recording transactions.
C3 Describe a ledger and a chart of accounts.
C4 Define debits and credits and explain double-entry accounting.
ANALYTICAL
A1 Analyze the impact of transactions on accounts and financial statements.
A2 Compute the debt ratio and describe its use in analyzing financial condition.
PROCEDURAL
P1 Record transactions in a journal and post entries to a ledger.
P2 Prepare and explain the use of a trial balance.
P3 Prepare financial statements from business transactions.
© McGraw Hill 2
© McGraw-Hill Education.
, Learning Objective C1
Explain the steps in processing
transactions and the role of
source documents.
© McGraw Hill 3
, Basics of Financial Statements
Business transactions and events are the starting points of
financial statements. Process from transactions to financial
statements is as follows:
• Identify each transaction and event from source documents.
• Analyze each transaction and event using the accounting
equation.
• Record relevant transactions and events in a journal.
• Post journal information to ledger accounts.
• Prepare and analyze the trial balance and financial
statements.
© McGraw Hill 4
Learning Objective C1: Explain the steps in processing transactions and the role of source documents.
