About This Chapter
Mechanics of the Accounting Cycle - Chapter Summary and Learning Objectives
In this chapter, we will take a look at the mechanics of the accounting cycle. Emphasis will be put on the accounting equation and the various ways in which it is used. You will learn about how to keep your accounts balanced and keep good records of debits and credits. Lessons will cover a variety of topics that will help you learn to keep accounts managed and ensure that you record everything in the ledger properly. Some of the things you will learn about include:
- The components of the accounting equation
- The purpose of source documents
- Categorizing transactions
- Defining ledgers
- Computing a return on assets
- Using financial statement ratios
|The Accounting Equation: Definition & Components||Learn about the components of the accounting equation.|
|Source Documents in Accounting: Definition and Purpose||Study the purpose of source documents.|
|Using the Accounting Equation: Adding Revenues, Expenses & Dividends||Take a look at adding revenues, expenses and dividends.|
|What Are Accounts? - Definition and Use to Categorize Transactions||Find out how to use accounts to categorize transactions.|
|Ledgers and Chart of Accounts: Definitions and Use||Examine ledgers and chart of accounts.|
|Understanding Debits and Credits in Accounting||Explore the role of debits and credits in double-entry accounting.|
|Recording Business Transactions in Accounting||Learn how to record the effects of various transactions, such as selling goods, acquiring assets and collecting cash.|
|Using the Accounting Equation: Analyzing Business Transactions||Study the process of analyzing business transactions using the accounting equation.|
|Computing and Interpreting Return on Assets||Find out how to compute and interpret return on assets.|
|Journal Entries and Trial Balance in Accounting||Take a look at recording transactions in a journal and determining a trial balance.|
|Financial Statement Ratios: Determining Company Performance||Examine how to compute various financial statement ratios, and how to use them to analyze company performance.|
1. The Accounting Equation: Definition & Components
There are a few basic building blocks that form the foundation of accounting. One of those is the accounting equation. In this lesson, you will learn what makes up the accounting equation, its purpose, and how it works.
2. Source Documents in Accounting: Definition and Purpose
Do you know what role source documents play in accounting? If not, don't worry; by the end of this lesson, you will. You will also learn the definition of source documents and see some common examples of source documents.
3. Using the Accounting Equation: Adding Revenues, Expenses & Dividends
Accounting is built on a solid foundation called the basic accounting equation. In this lesson, you're going to learn what happens when you add revenue, expenses, and dividends to the basic equation.
4. What Are Accounts? - Definition and Use to Categorize Transactions
Everything in this world is made up of parts. Accounting is no different. The numerous parts that exist in the accounting world are called accounts. In this lesson, you will learn what accounts are, how they are classified, and what they do.
5. Ledgers and Chart of Accounts: Definitions and Use
There are several key concepts that are important to learn when it comes to accounting. In this lesson, you will learn about the ledger and the chart of accounts.
6. Understanding Debits and Credits in Accounting
Debits and credits are major players in the accounting world. In this lesson, you will learn just what debits and credits are and why they are important to accounting.
7. Recording Business Transactions in Accounting
Recording a transaction is the first step in the accounting cycle. In this lesson, you will learn why transactions are recorded, where they are recorded, and how they are recorded.
8. Using the Accounting Equation: Analyzing Business Transactions
Transaction analysis can be a tricky task. In this lesson, you will learn what transaction analysis is, how to analyze a transaction, and how it is related to the accounting equation.
9. Computing and Interpreting Return on Assets
There are a number of ratios that can be calculated by information found on the financial statements. In this lesson, you will learn about return on assets.
10. Journal Entries and Trial Balance in Accounting
There are several concepts that make up an accounting cycle. In this lesson, you will learn about two of those - journal entries and the trial balance.
11. Financial Statement Ratios: Determining Company Performance
Have you ever wondered why the financial statements are so important to a company? In this lesson, you will learn about several financial statement ratios and how they help determine company performance.
12. What Is Profitability? - Definition & Analysis
Profitability determines whether a business stays in business. In this lesson, you'll learn about profitability and different ways to analyze it. A short quiz follows the lesson.
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Other chapters within the Accounting 101: Financial Accounting course
- Introduction to Accounting
- Financial Statements in Accounting
- Adjusting Accounts and Preparing Financial Statements
- Internal Controls in Accounting
- Merchandising Operations and Inventory in Accounting
- Receivables in Accounting
- Completing the Operating Cycle in Accounting
- Long-Term Assets in Accounting
- Current and Long-Term Liabilities in Accounting
- Reporting & Analyzing Equity in Accounting
- Statement of Cash Flows in Accounting
- Financial Statement Analysis in Accounting
- Studying for Accounting 101