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ACC 290 Week 2 Learning Team Reflection Summary.doc

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REFLECTION SUMMARY 1
Week Two Reflection Summary
ACC/290
University of Phoenix

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REFLECTION SUMMARY 2
In week one, one learned about the four basic financial statements and how they are
useful to internal and external users. One also learned the rules of debit and credit and
journalizing transactions.
The accounting financial statements composed of four basic financial statements. The
balance sheet provides an understanding of a company’s financial condition by showing what the
company owns and what it owes during a particular period. The income statement reports a
company’s revenues and expenses; it shows any profits or losses in a specific period. The
retained earnings statement shows how the company’s distributed its previous income to its
owners in the form of dividends and how much retained in the business. Then the statement of
cash flows shows where the company obtained cash and how it used it during that period.
The rules of debit and credit are simple and accountant often use them. The rules of debit
and credit is, if one account is debited another account will get credited. The accounts are assets,
liabilities, and equities, all reported on the balance sheet. One would log transactions, such as
office furniture purchases into debit section of the equipment account.
External users such as investors and creditors have no clue about what is going on within
a company. In order for them to stay abreast of a company’s financial stability and make well
informed decisions they must review a company’s financial statements. Investors assess the
financial strength of a company from information obtained in the financial statements. It also
provides them with a way of monitoring their investment and management’s performance.
Potential investors also use financial statements to decide if they will invest in the company.
Creditors (suppliers, banks, etc.) use financial statements to make lending decisions. For

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REFLECTION SUMMARY 3
example, they use this information to determine if a company is stable and aid in the decision of
whether a bank will loan additional money to the company.
A journal is a record that keeps accounting transactions in order as they occur. Every
business transactions are recorded in the general journal. The book of original entry is general
journal. A journal is the chronological record of transactions. Each entry is called a journal
entry and represents a different business transaction. Each transaction recorded once. All
journal entries follow the rules of debit and credit.
Journalizing transaction is very important for a business or personal use. Most people
journalize their cash paid for insurance, cash paid for supplies, journalize supplies bought on
account, journalize cash received from sales, and journalize services sold on account to keep
track on where and how their money are being spent.
Week one was full information that set a basis for general accounting practices. One will
be able to build onto this knowledge, and will prepare us for future endeavors.

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Anonymous
Awesome! Perfect study aid.

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