ACCT 220: Principles of Accounting I

ACCT 220, Principles of Accounting I, is a 3-credit undergraduate course at University of Maryland Global Campus and the starting point of its accounting sequence.

UMGC describes it as an introduction to the basic theory and techniques of contemporary financial accounting. You learn to identify the fundamental principles of accounting, identify and analyze business transactions, prepare financial statements and communicate that information to users with different needs.

The topics are the accounting cycle, transactions and the preparation of financial statements for single-owner businesses that operate as service companies or merchandisers. The course is not mathematically hard, but it is cumulative: a weak grasp of debits and credits in the first weeks makes every later topic harder.

What ACCT 220 Covers

Key Concepts Explained

The Accounting Equation and Double Entry

Assets = Liabilities + Owner's Equity. Every transaction keeps the equation in balance, which is why each entry has equal debits and credits. Assets and expenses increase with debits; liabilities, equity and revenue increase with credits.

Adjusting Entries

Accrual accounting records revenue when earned and expenses when incurred. Adjusting entries at period end bring accounts up to date.

Merchandising and Cost of Goods Sold

A merchandiser's gross profit is net sales minus cost of goods sold. Under a perpetual system, each sale has two entries: one for the revenue and one transferring the cost from inventory to cost of goods sold.

The Accounting Cycle Step by Step

1. Analyze each transaction and record it in the journal.
2. Post journal entries to ledger accounts.
3. Prepare an unadjusted trial balance.
4. Record adjusting entries and prepare an adjusted trial balance.
5. Prepare the financial statements.
6. Record closing entries and prepare a post-closing trial balance.

Most ACCT 220 problems test one or more of these steps, and errors at step one carry through to every later step.

Finding Errors When the Trial Balance Will Not Balance

Every ACCT 220 student meets a trial balance that refuses to balance. A few checks find most errors quickly. First, calculate the difference between the debit and credit totals. If the difference is divisible by 2, look for an amount posted to the wrong side (a $450 debit posted as a credit creates a $900 difference).

If it is divisible by 9, suspect a transposition, such as $540 written as $450. Next, confirm each account balance was carried to the correct column, then check that every journal entry was posted in full.

Finally, remember that a balanced trial balance does not prove the books are right: an entry posted to the wrong account, or omitted entirely, still balances.

Typical Assignments and How to Approach Them

Where Students Get Stuck

• Debits and credits. Memorize the normal balance of each account type.
• Adjustments. Ask what was earned or used this period that is not yet recorded.
• Closing entries. Revenue, expense and drawing accounts close; balance sheet accounts do not.
• Merchandising entries. Remember the cost side of each sale under a perpetual system.

Study Tips for ACCT 220

• Practice transaction analysis daily for the first few weeks.
• Use T-accounts to visualize postings.
• Rework textbook examples without looking at the answer.
• Keep a one-page sheet of account types and normal balances.

How We Help with ACCT 220

Send the assignment instructions, any templates and your workings. An accounting tutor can explain concepts, prepare a custom solution for reference, or check your entries and statements. See our accounting assignment help guide for more.

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