Accounting Equation-An Introduction
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The document introduces the accounting equation, which states that for any business, assets must equal liabilities plus owner's equity. Assets are the resources owned, like cash, inventory, or property. Liabilities are debts owed, such as loans or unpaid expenses. Owner's equity represents the owner's claim to assets after liabilities are paid. The accounting equation also applies to individuals and must always balance.
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The Accounting Equation - Introduction
The accounting equation states that assets must always equal the sum of capital and liabilities. It is the fundamental concept in accounting that the resources (assets) of a business are supplied by either its owners (capital) or others it owes (liabilities). Assets represent the resources owned, capital represents the owners' claim to assets, and liabilities represent amounts owed to non-owners. The equation must always balance, as it reflects two ways of looking at the same financial position of a business. Examples are given to illustrate how transactions affect the components of the equation while maintaining the balance.
Accounting equation
Basic Accounting Equation
Assets
Liabilities
Owner’s Equity
Investment
Drawing
Revenue
Expenses
Explanation of the transaction
Consolidated financial statement
The document provides an overview of consolidated financial statements. It discusses how a parent company combines the financial statements of its subsidiaries by eliminating reciprocal accounts and adjusting for the difference between the parent's cost of its investment and the book value of the subsidiary's underlying equity. The objectives covered include recognizing the benefits of consolidated statements, requirements for inclusion of subsidiaries, allocating excess investment costs, preparing consolidated balance sheets at acquisition and subsequent periods, accounting for minority interests, and preparing consolidated income statements.
Accounting concept
This document discusses key accounting concepts and principles, including:
- Business entity, which treats a business and its owners as separate entities
- Money measurement, which records all transactions in monetary terms
- Going concern, which assumes a business will continue operating indefinitely
It also outlines principles such as historical cost, conservatism, consistency, and disclosure, and how they guide financial reporting. Challenges in revenue and expense recognition are addressed, along with users of financial statements and limitations of conventional reports.
Accounting basics
Accounting is defined as the art of Recording, Classifying and Summarizing transactions in monetary terms (in Money terms) for preparation of Financial Statements
Book- keeping includes recording of journal, posting in ledgers and balancing of accounts. All the records before the preparation of trail balance is the whole subject matter of book- keeping.
Accounting, is an information system is the process of identifying, measuring and communicating the economic information of an organization to its users who need the information for decision making.
The accounting equation
The accounting equation shows that assets and liabilities of a company are equal. It is based on the dual concept that every transaction has two effects - a debit and a credit. Assets are possessions that result in economic resources flowing into the business, while liabilities are debts that result in outflows. Owners' equity represents the owners' claim on assets. To prepare an accounting equation, transactions are analyzed in terms of their impact on assets, liabilities, expenses and owners' equity, and the relevant accounts are adjusted. An example shows a business owner investing cash, increasing both the asset and owners' equity accounts by the same amount.
Financial Accounting
best ppt for all students pursuing MBA
download it and have success in finance
if like pass on coments to hotpboy@gmail.com
Classification of Accounts in Accounting
Learning Objective: After watching this lesson, you should be able to:
Demonstrate understanding on the different accounts or terminologies in accounting.
Available also on Youtube https://youtu.be/_p7f20KZdzs
For updates and latest posts, please subscribe this channel and follow on facebook facebook.com/divinegracechannel and slideshare slideshare.net/dvgmartinez
Recommended
The Accounting Equation - Introduction
The accounting equation states that assets must always equal the sum of capital and liabilities. It is the fundamental concept in accounting that the resources (assets) of a business are supplied by either its owners (capital) or others it owes (liabilities). Assets represent the resources owned, capital represents the owners' claim to assets, and liabilities represent amounts owed to non-owners. The equation must always balance, as it reflects two ways of looking at the same financial position of a business. Examples are given to illustrate how transactions affect the components of the equation while maintaining the balance.
Accounting equation
Basic Accounting Equation
Assets
Liabilities
Owner’s Equity
Investment
Drawing
Revenue
Expenses
Explanation of the transaction
Consolidated financial statement
The document provides an overview of consolidated financial statements. It discusses how a parent company combines the financial statements of its subsidiaries by eliminating reciprocal accounts and adjusting for the difference between the parent's cost of its investment and the book value of the subsidiary's underlying equity. The objectives covered include recognizing the benefits of consolidated statements, requirements for inclusion of subsidiaries, allocating excess investment costs, preparing consolidated balance sheets at acquisition and subsequent periods, accounting for minority interests, and preparing consolidated income statements.
Accounting concept
This document discusses key accounting concepts and principles, including:
- Business entity, which treats a business and its owners as separate entities
- Money measurement, which records all transactions in monetary terms
- Going concern, which assumes a business will continue operating indefinitely
It also outlines principles such as historical cost, conservatism, consistency, and disclosure, and how they guide financial reporting. Challenges in revenue and expense recognition are addressed, along with users of financial statements and limitations of conventional reports.
Accounting basics
Accounting is defined as the art of Recording, Classifying and Summarizing transactions in monetary terms (in Money terms) for preparation of Financial Statements
Book- keeping includes recording of journal, posting in ledgers and balancing of accounts. All the records before the preparation of trail balance is the whole subject matter of book- keeping.
Accounting, is an information system is the process of identifying, measuring and communicating the economic information of an organization to its users who need the information for decision making.
The accounting equation
The accounting equation shows that assets and liabilities of a company are equal. It is based on the dual concept that every transaction has two effects - a debit and a credit. Assets are possessions that result in economic resources flowing into the business, while liabilities are debts that result in outflows. Owners' equity represents the owners' claim on assets. To prepare an accounting equation, transactions are analyzed in terms of their impact on assets, liabilities, expenses and owners' equity, and the relevant accounts are adjusted. An example shows a business owner investing cash, increasing both the asset and owners' equity accounts by the same amount.
Financial Accounting
best ppt for all students pursuing MBA
download it and have success in finance
if like pass on coments to hotpboy@gmail.com
Classification of Accounts in Accounting
Learning Objective: After watching this lesson, you should be able to:
Demonstrate understanding on the different accounts or terminologies in accounting.
Available also on Youtube https://youtu.be/_p7f20KZdzs
For updates and latest posts, please subscribe this channel and follow on facebook facebook.com/divinegracechannel and slideshare slideshare.net/dvgmartinez
Accounting equation
The document discusses the accounting equation which states that for any business, assets must equal the sum of liabilities and owner's equity. Assets are economic resources owned by the business. Liabilities are amounts owed by the business. Owner's equity represents the owner's claim on the assets of the business. The accounting equation - assets = liabilities + owner's equity - must always balance as transactions occur. Several examples of how the equation is affected by common business transactions like purchases, sales, and payments are provided.
Financial Statements
Financial statements are formal records that evaluate a company's financial stability, performance, and liquidity. There are three main financial statements:
1) The income statement shows profits/losses over time.
2) The balance sheet presents assets, liabilities, and equity on a given date.
3) The cash flow statement shows cash inflows and outflows from operating, investing, and financing activities over time.
Together these statements provide useful information to investors and management, while also having some limitations since they only represent past performance and financial snapshots versus future potential.
CHAPTER 2 Recording Business Transactions
This document discusses key accounting concepts such as accounts, ledgers, debits and credits, journals, and trial balances. It provides examples to illustrate how to record business transactions using double-entry accounting. Specifically, it shows a journal entry to record an initial investment in a business. It also demonstrates how to post journal entries to accounts in the general ledger and prepare a trial balance to check the equality of debits and credits.
Double entry systme
After reading this topic you should be able to understand
1-Double Entry System
2- Accounts and their classification
3- Rules of Debit and Credit
Accounting Equation Presentation
The document discusses the accounting equation and how it is affected by business transactions.
The accounting equation states that total assets are equal to total liabilities plus owner's equity. It must always balance as transactions occur. Several examples are provided of how common business transactions like purchases, sales, expenses, and cash payments impact the accounting equation by increasing or decreasing different accounts. The procedure for preparing accounting equations based on transaction details is also outlined.
Accounting Equation
The accounting equation states that a company's assets must equal the sum of its liabilities and equity. Assets are resources owned by a company such as land, equipment, buildings, cash, vehicles, stock, and amounts owed to the company by debtors. Liabilities represent creditors' claims on a company's assets such as bank loans, accrued expenses, and amounts owed to creditors. Equity represents the owners' claims on the company's assets through investments, revenues, and drawings on the business. The accounting equation must remain balanced after every business transaction.
Single and double entry system
Bookkeeping means systematic recording of day-to-day activities such as financial transactions and expense accrual for a business. The company needs to track such details for making well operational decisions.
Accounting equation
The accounting equation states that assets are equal to liabilities plus owner's equity. It represents the relationship between what a business owns (assets), what it owes (liabilities), and the owner's claim on the assets (owner's equity). Every transaction affects at least two accounts to maintain the balance of the accounting equation. The equation ensures that the sources of a business's assets are identified as either belonging to creditors (liabilities) or the owner (owner's equity).
Introduction to Financial statements - Accounting
Financial statement introduction and its elements.
There are three fundamental financial statements used in accounting.
The income statement shows revenues and expenses.
The balance sheet is a listing of all asset, liability, and equity account balances that do not appear on the income statement.
The statement of cash flows shows how the company receives and spends its cash.
Branches of accounting
There are several branches of accounting:
1) Financial accounting focuses on external users and communicating economic activities through financial statements.
2) Management accounting emphasizes preparing and analyzing internal accounting information to support decision making.
3) Government accounting records and reports on government fund receipts, spending, and asset/liability transactions and events.
4) Tax accounting helps with tax planning, preparation, and compliance to minimize taxes legally.
accounting
This document provides an overview of accounting concepts and principles. It defines accounting as identifying, recording, classifying and summarizing financial transactions and interpreting the results. The key characteristics are that accounting is an art that involves recording transactions in money terms and interpreting results. The main objectives of accounting are to provide financial information to various stakeholders like owners, creditors, and tax authorities.
Cash Flow Statement
The document discusses the cash flow statement and how it provides information about cash inflows and outflows during a period of time for operating, investing, and financing activities. It explains that the cash flow statement highlights cash flows from different activities and is useful for short-term financial planning and cash management. However, it does not show the total financial position or liquidity of a firm.
The golden rules in accounting or rules of debit and credit
Journal Entries cannot be recorded without some rules. The rules which are used to record a journal entry are called Golden rules of Accounting. It means debit the person who receives something from the business
Meaning Of Accounting
PLEASE
LIKE AND COMMENT YOUR VIEWS
Meaning of accounting,functions,Procedural aspects of accounting,Accounting cycle,Origin of accounting
Double Entry System & Accountin Equation
1) The accounting equation shows that a company's assets are always equal to its liabilities plus equity.
2) Double entry accounting requires every transaction to have equal debits and credits so the accounting equation remains balanced.
3) Examples of transactions that affect the accounting equation include purchasing inventory, receiving payment from customers, and paying expenses.
Financial accounting
This presentation is based on the subject Financial Accounting which helps the beginners to know the basic concept of accounting . This is according to the syllabus of Pt. Ravishankar University , Raipur and Durg University, Durg.
| Financial Statements | Basic Financial Statements | Types of Financial Stat...
Learning Objective 1: To explain the nature and general purpose of financial statements.
Learning Objective 2: To explain certain accounting principles that are important for an understanding of financial statements and how professional judgment by accountants may affect the application of those principles.
Learning Objective 3: To demonstrate how certain business transactions affect the elements of the accounting equation: Assets = Liabilities + Owners’ Equity.
Learning Objective 4: To explain how the statement of financial position, often referred to as the balance sheet, is an expansion of the basic accounting equation.
Learning Objective 5: To explain how the income statement reports an enterprise’s financial performance for a period of time in terms of the relationship of revenues and expenses.
Learning Objective 6: To explain how the statement of cash flows presents the change in cash for a period of time in terms of the company’s operating, investing, and financing activities.
Learning Objective 7: To explain the important relationships among the statement of financial position, income statement, and statement of cash flows, and how these statements relate to each other.
Learning Objective 8: To explain common forms of business ownership—sole proprietorship, partnership, and corporation—and demonstrate how they differ in terms of their presentation in the statement of financial position.
Learning Objective 9: To discuss the importance of financial statements to a company and its investors and creditors and why management may take steps to improve the appearance of the company in its financial statements.
Ratio analysis
This document discusses various types of financial ratios used for ratio analysis. It defines ratio analysis as a technique used to analyze and interpret financial statements to help with decision making. It then covers different types of ratios including liquidity ratios, activity ratios, solvency ratios, profitability ratios, and market test/valuation ratios. Specific ratios discussed include current ratio, quick ratio, inventory turnover ratio, debt-equity ratio, return on equity, earnings per share, and others. The document provides formulas and explanations for calculating and interpreting these various financial ratios.
Financial Ratios
The document discusses various financial ratios that can be used to analyze a company's financial health and performance. It covers liquidity ratios, activity ratios, debt ratios, and profitability ratios. It also describes the DuPont analysis approach, which integrates ratios to determine key measures of profitability and return on assets and equity.
Accounting - Chapter 1
This document provides an overview of key accounting concepts and principles including:
- Accounting measures and communicates financial information as the language of business. It has internal and external users.
- There are three main fields: management, financial, and public sector accounting. Standards are set by groups like FASB, SEC, and AICPA.
- Business organizations can be proprietorships, partnerships, or corporations, each with advantages and disadvantages.
- Key concepts include the accounting equation, GAAP, revenues/expenses, and preparing financial statements like the income statement, balance sheet, and statement of cash flows to evaluate business performance.
Accounting - Lesson 3 : The Business Transactions
This document provides an overview of lesson 3 in an accounting course for beginners. It discusses 4 key learning objectives: 1) business transactions, 2) four transactions that affect the balance sheet, 3) four transactions that affect the income statement. It defines important terms like revenue, expense, assets, liabilities, and equity. It also summarizes the basic steps for analyzing a business transaction and the 8 most important types of transactions that affect financial statements.
Accounting equation
The accounting equation forms the foundation of all accounting systems and illustrates that a company's assets are equal to its liabilities plus equity. Assets are resources owned or controlled by a company that will provide future benefits, while liabilities are amounts of money owed to others. Equity represents the portion of company assets belonging to shareholders or partners. The equation always holds true and assets must equal the sum of liabilities and equity. Transactions like starting a business or purchasing property impact the equation by increasing or decreasing accounts.
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Accounting equation
The document discusses the accounting equation which states that for any business, assets must equal the sum of liabilities and owner's equity. Assets are economic resources owned by the business. Liabilities are amounts owed by the business. Owner's equity represents the owner's claim on the assets of the business. The accounting equation - assets = liabilities + owner's equity - must always balance as transactions occur. Several examples of how the equation is affected by common business transactions like purchases, sales, and payments are provided.
Financial Statements
Financial statements are formal records that evaluate a company's financial stability, performance, and liquidity. There are three main financial statements:
1) The income statement shows profits/losses over time.
2) The balance sheet presents assets, liabilities, and equity on a given date.
3) The cash flow statement shows cash inflows and outflows from operating, investing, and financing activities over time.
Together these statements provide useful information to investors and management, while also having some limitations since they only represent past performance and financial snapshots versus future potential.
CHAPTER 2 Recording Business Transactions
This document discusses key accounting concepts such as accounts, ledgers, debits and credits, journals, and trial balances. It provides examples to illustrate how to record business transactions using double-entry accounting. Specifically, it shows a journal entry to record an initial investment in a business. It also demonstrates how to post journal entries to accounts in the general ledger and prepare a trial balance to check the equality of debits and credits.
Double entry systme
After reading this topic you should be able to understand
1-Double Entry System
2- Accounts and their classification
3- Rules of Debit and Credit
Accounting Equation Presentation
The document discusses the accounting equation and how it is affected by business transactions.
The accounting equation states that total assets are equal to total liabilities plus owner's equity. It must always balance as transactions occur. Several examples are provided of how common business transactions like purchases, sales, expenses, and cash payments impact the accounting equation by increasing or decreasing different accounts. The procedure for preparing accounting equations based on transaction details is also outlined.
Accounting Equation
The accounting equation states that a company's assets must equal the sum of its liabilities and equity. Assets are resources owned by a company such as land, equipment, buildings, cash, vehicles, stock, and amounts owed to the company by debtors. Liabilities represent creditors' claims on a company's assets such as bank loans, accrued expenses, and amounts owed to creditors. Equity represents the owners' claims on the company's assets through investments, revenues, and drawings on the business. The accounting equation must remain balanced after every business transaction.
Single and double entry system
Bookkeeping means systematic recording of day-to-day activities such as financial transactions and expense accrual for a business. The company needs to track such details for making well operational decisions.
Accounting equation
The accounting equation states that assets are equal to liabilities plus owner's equity. It represents the relationship between what a business owns (assets), what it owes (liabilities), and the owner's claim on the assets (owner's equity). Every transaction affects at least two accounts to maintain the balance of the accounting equation. The equation ensures that the sources of a business's assets are identified as either belonging to creditors (liabilities) or the owner (owner's equity).
Introduction to Financial statements - Accounting
Financial statement introduction and its elements.
There are three fundamental financial statements used in accounting.
The income statement shows revenues and expenses.
The balance sheet is a listing of all asset, liability, and equity account balances that do not appear on the income statement.
The statement of cash flows shows how the company receives and spends its cash.
Branches of accounting
There are several branches of accounting:
1) Financial accounting focuses on external users and communicating economic activities through financial statements.
2) Management accounting emphasizes preparing and analyzing internal accounting information to support decision making.
3) Government accounting records and reports on government fund receipts, spending, and asset/liability transactions and events.
4) Tax accounting helps with tax planning, preparation, and compliance to minimize taxes legally.
accounting
This document provides an overview of accounting concepts and principles. It defines accounting as identifying, recording, classifying and summarizing financial transactions and interpreting the results. The key characteristics are that accounting is an art that involves recording transactions in money terms and interpreting results. The main objectives of accounting are to provide financial information to various stakeholders like owners, creditors, and tax authorities.
Cash Flow Statement
The document discusses the cash flow statement and how it provides information about cash inflows and outflows during a period of time for operating, investing, and financing activities. It explains that the cash flow statement highlights cash flows from different activities and is useful for short-term financial planning and cash management. However, it does not show the total financial position or liquidity of a firm.
The golden rules in accounting or rules of debit and credit
Journal Entries cannot be recorded without some rules. The rules which are used to record a journal entry are called Golden rules of Accounting. It means debit the person who receives something from the business
Meaning Of Accounting
PLEASE
LIKE AND COMMENT YOUR VIEWS
Meaning of accounting,functions,Procedural aspects of accounting,Accounting cycle,Origin of accounting
Double Entry System & Accountin Equation
1) The accounting equation shows that a company's assets are always equal to its liabilities plus equity.
2) Double entry accounting requires every transaction to have equal debits and credits so the accounting equation remains balanced.
3) Examples of transactions that affect the accounting equation include purchasing inventory, receiving payment from customers, and paying expenses.
Financial accounting
This presentation is based on the subject Financial Accounting which helps the beginners to know the basic concept of accounting . This is according to the syllabus of Pt. Ravishankar University , Raipur and Durg University, Durg.
| Financial Statements | Basic Financial Statements | Types of Financial Stat...
Learning Objective 1: To explain the nature and general purpose of financial statements.
Learning Objective 2: To explain certain accounting principles that are important for an understanding of financial statements and how professional judgment by accountants may affect the application of those principles.
Learning Objective 3: To demonstrate how certain business transactions affect the elements of the accounting equation: Assets = Liabilities + Owners’ Equity.
Learning Objective 4: To explain how the statement of financial position, often referred to as the balance sheet, is an expansion of the basic accounting equation.
Learning Objective 5: To explain how the income statement reports an enterprise’s financial performance for a period of time in terms of the relationship of revenues and expenses.
Learning Objective 6: To explain how the statement of cash flows presents the change in cash for a period of time in terms of the company’s operating, investing, and financing activities.
Learning Objective 7: To explain the important relationships among the statement of financial position, income statement, and statement of cash flows, and how these statements relate to each other.
Learning Objective 8: To explain common forms of business ownership—sole proprietorship, partnership, and corporation—and demonstrate how they differ in terms of their presentation in the statement of financial position.
Learning Objective 9: To discuss the importance of financial statements to a company and its investors and creditors and why management may take steps to improve the appearance of the company in its financial statements.
Ratio analysis
This document discusses various types of financial ratios used for ratio analysis. It defines ratio analysis as a technique used to analyze and interpret financial statements to help with decision making. It then covers different types of ratios including liquidity ratios, activity ratios, solvency ratios, profitability ratios, and market test/valuation ratios. Specific ratios discussed include current ratio, quick ratio, inventory turnover ratio, debt-equity ratio, return on equity, earnings per share, and others. The document provides formulas and explanations for calculating and interpreting these various financial ratios.
Financial Ratios
The document discusses various financial ratios that can be used to analyze a company's financial health and performance. It covers liquidity ratios, activity ratios, debt ratios, and profitability ratios. It also describes the DuPont analysis approach, which integrates ratios to determine key measures of profitability and return on assets and equity.
Accounting - Chapter 1
This document provides an overview of key accounting concepts and principles including:
- Accounting measures and communicates financial information as the language of business. It has internal and external users.
- There are three main fields: management, financial, and public sector accounting. Standards are set by groups like FASB, SEC, and AICPA.
- Business organizations can be proprietorships, partnerships, or corporations, each with advantages and disadvantages.
- Key concepts include the accounting equation, GAAP, revenues/expenses, and preparing financial statements like the income statement, balance sheet, and statement of cash flows to evaluate business performance.
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The golden rules in accounting or rules of debit and credit
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This document provides an overview of lesson 3 in an accounting course for beginners. It discusses 4 key learning objectives: 1) business transactions, 2) four transactions that affect the balance sheet, 3) four transactions that affect the income statement. It defines important terms like revenue, expense, assets, liabilities, and equity. It also summarizes the basic steps for analyzing a business transaction and the 8 most important types of transactions that affect financial statements.
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The accounting equation forms the foundation of all accounting systems and illustrates that a company's assets are equal to its liabilities plus equity. Assets are resources owned or controlled by a company that will provide future benefits, while liabilities are amounts of money owed to others. Equity represents the portion of company assets belonging to shareholders or partners. The equation always holds true and assets must equal the sum of liabilities and equity. Transactions like starting a business or purchasing property impact the equation by increasing or decreasing accounts.
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The accounting equation forms the foundation of accounting and illustrates that a company's assets are equal to its liabilities plus equity. Assets are resources owned, while liabilities are amounts owed. Equity represents the portion owned by shareholders. The equation always balances - if assets increase, liabilities or equity must also rise by the same amount. An example shows a business owner contributing cash for shares, increasing assets and equity, and later the company takes a loan to buy a building, increasing assets and liabilities to maintain the balance.
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* Began year with retained earnings of $217
* Issued $294 of common stock
* Recorded expenses of $840
* Paid dividends of $56
* Ending retained earnings is $231
* Change in retained earnings is $231 - $217 = $14
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Accounting Equation-An Introduction
- 1. The Accounting Equation An Introduction 1
- 2. All businesses have three parts to their financial makeup: • The things or property that the company owns. We call these things ASSETS. • The money that the company owes to other people. We call these obligations LIABILTIES. • The claim of the owner of the business to the Assets after the Liabilities are paid. We call this claim OWNER’S EQUITY (or just EQUITY). 2
- 3. These three parts ALWAYS have the same relationship to each other. We call this relationship the Accounting Equation Assets = Liabilities + Equity 3
- 4. The Accounting Equation could also apply to a personal situation. Suppose you buy a car for $5,000, borrow $4,000 from the bank, and pay the rest yourself. Here’s the result: Accounting Equation Assets = Liabilities + Equity $5,000 = $4,000 + $1,000 4
- 5. ASSETS are the RESOURCES OWNED BY A BUSINESS . Here are some types of assets that might be owned by a business company: Cash Notes Accounts Receivable Receivable Vehicles ASSETS Land Store Buildings Supplies Equipment 5
- 6. LIABILITIES are the CREDITOR’S CLAIMS ON ASSETS. • Creditors are the people or companies to whom a business owes something (like money). • Here are some types of liabilities that a company might owe: Accounts Notes Payable Payable LIABILITIES Taxes Wages Payable Payable 6
- 7. EQUITY is the OWNER’S CLAIM ON ASSETS In a business EQUITY is composed of four parts that either increase or decrease equity: EQUITY CAPITAL: WITHDRAWALS: REVENUES: EXPENSES: What the owner puts − What the owner takes out of the + What the company − What the company into the business receives for pays to business sales operate the business. INCREASE DECREASE INCREASE DECREASE 7
- 8. Sometimes we expand the Accounting Equation to show all the Equity components. This is called the EXPANDED ACCOUNTING EQUATION. This equation must ALWAYS BE IN BALANCE 8