Capturing the economic events of PepsiCo, Inc. , however, is an entirely different matter. This giant corporation generates annual revenue of over $30 billion from sales of its beverage products, its Frito-Lay snack foods, and its Quaker Oats cereal and pasta products. Employing nearly 150,000 people, and operating hundreds of manufacturing facilities and thousands of warehouses and distribution centers, PepsiCo, Inc. , must somehow capture complex business transactions occurring in more than 200 countries worldwide.
From lemonade stands to multinational corporations, being able to efficiently capture the effects of economic events, such as sales orders and raw material purchases, is absolutely essential for survival. Companies like PepsiCo, Inc. , rely upon sophisticated computer systems to capture economic activities. Some small enterprises, however, may use paper ledgers and journals to record business transactions.
AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO:
Describe a ledger account and a ledger. |
|
|
|
Understand how balance sheet accounts are increased or decreased. |
|
|
|
Explain the double-entry system of accounting. |
|
|
|
Explain the purpose of a journal and its relationship to the ledger. |
|
|
|
Explain the nature of net income, revenue, and expenses. |
|
|
|
Apply the realization and matching principles in recording revenue and expenses. |
|
|
|
Understand how revenue and expense transactions are recorded in an accounting system. |
|
|
|
Prepare a trial balance and explain its uses and limitations. |
|
|
|
Distinguish between accounting cycle procedures and the knowledge of accounting. |
|
|
|
Identify the steps in the accounting cycle and discuss the role of accounting records in an organization. |