Joel Lerner - Schaums Outline of Bookkeeping and Accounting

SCHAUMS OUTLINE OF
Bookkeeping and Accounting

Fourth EditionJOEL J. LERNER, M.S., P.D.Professor of Business (Retired)
Sullivan County Community CollegeRevised by Rajul Y. Gokarn, Ph.D.Associate Professor of Accounting
Clark Atlanta UniversitySchaumS Outline Series Copyright 2007, 1994, 1988, 1987 by The McGraw-Hill Companies, Inc. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. ISBN: 978-0-07-170249-2 MHID: 0-07-170249-0 The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-163536-3, MHID: 0-07-163536-X.

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This fourth edition brings to the study of bookkeeping and accounting the same solved-problems approach that has proved so successful in the disciplines of engineering, mathematics, and accounting.

In contrast to previous supplementary materials, which have been little more than summary textbooks, this book is organized around the practical application of basic bookkeeping and accounting concepts. This book develops the students ability to understand and solve bookkeeping and accounting problems by providing the following: 1. Concise definitions and explanations, in easily understood terms 2. Fully worked-out solutions to a large range of problems (against which students can check their own solutions) 3. Review questions 4. Sample examinations typical of those used by high schools and 2- and 4-year colleges 5.

Comprehensive Review Problems in each subject category An added feature of this edition is a chapter on Peachtree Complete accounting and bookkeeping software. Joel J. Lerner SCHAUMS OUTLINE OF
THEORY AND PROBLEMS OF
BOOKKEEPING AND ACCOUNTING

An understanding of the principles of bookkeeping and accounting is essential for anyone who is interested in a successful career in business. The purpose of bookkeeping and accounting is to provide information concerning the financial affairs of a business. This information is needed by owners, managers, creditors, and governmental agencies. An individual who earns a living by recording the financial activities of a business is known as a bookkeeper, while the process of classifying and summarizing business transactions and interpreting their effects is accomplished by the accountant. The bookkeeper is concerned with techniques involving the recording of transactions, and the accountants objective is the use of data for interpretation.

Bookkeeping and accounting techniques will both be discussed.

The financial condition or position of a business enterprise is represented by the relationship of assets to liabilities and owners equity, also known as capital. Assets: are a business enterprises economic resources, formally defined as probable economic benefits obtained or controlled by a particular entity as a result of post transactions or events. These include properties that are owned and have monetary value such as cash, inventory, land, building equipment, etc. Liabilities: are the economic obligations of a company. Liabilities are formally defined as probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events.

Liabilities include amounts owed to outsiders such as notes payable, accounts payable, bonds payable, mortgage payable, etc. Owners Equity: in a business enterprise is called the residual interest in the assets of an entity that remains after deducting its liabilities. It is also known as capital and includes owners interest in the business enterprise. These three basic elements are connected by a fundamental relationship called the accounting equation. This equation expresses the equality of the assets on one side with the claims of the creditors and owners on the other side: According to the accounting equation, a firm is assumed to possess its assets subject to the rights of the creditors and owners.

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