Summary Ch2- Accounting Information System Practice Questions

ROTMAN SCHOOL OF MANAGEMENT

RSM 219 – LECTURE 2 - THE ACCOUNTING INFORMATION SYSTEM AND FINANCIAL
STATEMENTS

In-Class Exercise



You and a friend decide to start a tutoring company where you will offer first year U of T students
tutoring services on various topics such as accounting, finance and economics.

In the first month of operations, a variety of events happen and must be recorded in order to produce
financial statements.



PART 1) RECORDING TRANSACTIONS WITH THE BASIC ACCOUNTING EQUATION

PART 2) RECORDING TRANSACTIONS USING JOURNAL ENTRIES AND T-ACCOUNTS



TRANSACTION #1:



PART 1

You and your friend decide to incorporate the company. As a result, you each contribute $2,500 into
the company in exchange for 100 common shares each. valve

ASSETS = LIABILITIES SH EQUITY
+ 2500 1- 2500 (common shares )
+2500 -12500 Common shares
]

PART 2

Journal Entry and T-Accounts:



Dr. Cath 5000

Cr . Common shares 5000




1