2 Transaction Analysis - Pearson

SPOTLIGHTAPPLE COMPUTER, do you manage your music library? You may use Apple Computer s iTunes , which along with thecompany s iPods generates lots of income for the does Apple determine the amount of its revenues, expenses, and net income? Like all othercompanies, Apple Computer has a comprehensive accounting system. Apple s income statement (statementof operations) is given at the start of this chapter. The income statement shows that during fiscal year 2006,Apple made over $19 billion of sales and earned net income of $2 billion. Where did those figures comefrom? In this chapter, we ll show Analysis22 Chapter 40878 Page 53 09/25/07 jhr2 Chapter 40878 9/25/07 3:18 PM Page 5354 Chapter 2 Transaction AnalysisChapter 1 introduced the financial statements. Chapter 2 will showyou how companies actually record the transactions that eventually become part ofthe financial OBJECTIVES1 Analyzetransactions2 Understandhow accounting works3 Recordtransactions in the journal4 Usea trial balance5 Analyzetransactions using only T-accountsApple Computer, of Operations (Adapted) Fiscal Year Ended September 30, 2006 Net of goods expenses: Research and development expense.

54 Chapter 2 Transaction Analysis Chapter 1 introduced the financial statements. Chapter 2 will show you how companies actually record the transactions that eventually become part of the financial statements. LEARNING OBJECTIVES 1 Analyze transactions 2 Understand how accounting works 3 Record transactions in the journal 4 Use a trial balance

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