This chapter focuses on the accounting process. We describe transactions and source documents as inputs for analysis. We explain the analysis and recording of transactions. The accounting equation, T-account, general ledger, trial balance, and debits and credits are applied tools in the accounting process.

Conceptual

Explain the purpose and importance of accounting in the information age.

Identify users and uses of accounting.

Identify opportunities in accounting and related fields.

Explain why ethics are crucial to accounting.

Explain the meaning of generally accepted accounting principles and define and apply several key accounting principles.

Appendix 1B-Identify and describe the three major activities in organizations.

Analytical

Define and interpret the accounting equation and each of its components.

Analyze business transactions using the accounting equation.

Compute and interpret return on assets.

Appendix 1A-Explain the relation between return and risk.

Procedural

Identify and prepare basic financial statements and explain how they interrelate.