Concept of Accounting Equation and the effect of transactions on Accounting Equation. To know about asset, liabilities, equities and concept of accounting equation. how to analyze accounting equation. Effect of transactions on accounting equation.

2. Mohammad Jashim Uddin
Assistant Professor
Wali Newaz Khan College, Kishoreganj.
Bangladesh
 Subject: Principles of Accounting
 Topic: Accounting Equation
 Level: Honor's 1st year

3. 
 https://www.youtube.com/watch?v=vTyu1qqR0a8

4. ACCOUNTING EQUATION
Topic

5. OBJECTVIES:
The goal of this topic is to provide
students with the concept of Accounting
Equation and its application .

6. Learning
Outcomes:
Explain the concept of accounting equation, and its
components.
Analyze the effects of business transactions on the
accounting equation.
At the end of
the lesson
students will
be able to

7. Accounting
Equation
Assets
Liabilities
+ Equity
Asset Liabilities Equity
+
=

8. Accounting
Equation
An algebraic equation that expresses
the relationship between assets,
liabilities, and owners’equity.

10. Land
Equipment
Buildings
Cash
Vehicles
Store
Supplies
Notes
Receivable
Accounts
Receivable
Resources
owned or
controlled by
a company

11. Asset Equity ?
-

12. Taxes
Payable
Wages
Payable
Notes
Payable
Accounts
Payable
Creditors’
claims on
assets

13. Drawing Additional
Capital
Reserve
fund
Capital
Equity means
Ownership claims
on total assets.

14. Group - A
Identify Assets
Group - B
Identify Liabilities
Group - C
Identify Equity
Group - D
Identify which are not
asset, liabilities and
equity
List of Accounts: Cash, Notes payable, Accounts receivable,
Drawing, salaries payable, Additional capital, sales,
Unearned revenue , Advertising, prepaid insurance.

15. Transaction 1:
Ray Neal starts a smart phone app development
company which he names Softbyte. On September 1,
2017, he invests $15,000 cash in the business.
Asset = Liabilities + Equity
Cash = Owner’s
capital
(1) +$15000 = +$15000

16. Transaction 2:
Softbyte purchases computer equipment for $7,000
cash.
Asset = Liabilities + Equity
Cash + Equipment = Owner’s
capital
+$15000 = +$15000
(2) - 7000+-7000 =
$8000+7000
$15000 = $15000

17. Transaction 3:
Softbyte purchases for $1,600 from Mobile Solutions headsets
and other computer accessories expected to last several
months. Mobile Solutions agrees to allow Softbyte to pay this
bill in October.
Asset = Liabilities + Equity
Cash + Equipment +Supplies = Accounts
payable
Owner’s
capital
$8000 + $7000 = +$15000
(3) +$1600 = +$1600
$8000 + $7000 +$1600 +$1600 + +$15000
$16600 = $16600

18. Transaction 4:
Softbyte receives $1,200 cash from customers for app
development services it has performed.
Asset = Liabilities + Equity
Cash + Equipment +Supplies = Accounts
payable
Owner’s
Capital +Revenue
$8000 + $7000 +$1600 = +$1600 + +$15000
(4)+1200 = +$1200
$9200 + $7000 +$1600 = +$1600 + +$15000 + $1200
$17800 = $17800

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21. Homework