Lesson 4

Objective

1) Describe business events using debit/credit terminology.

2) Record transactions in T-accounts and show their effect on financial statements.

3) Record transactions using the general journal format and show their effect on the financial statements.

4) Prepare a trial balance and explain how it is used to prepare financial statements.

5) Use a return on asset ratio, debt to assets ratio, and a return on equity ratio to analyze financial statements.

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