This document provides an overview of accounting concepts including understanding accounting, the accounting process, elements of accounting like the trial balance, trading account calculations, examples of profit and loss statements and balance sheets, and cash flow statements. It covers key accounting topics through definitions, examples, and recaps to provide a high-level understanding of financial management and accounting principles.

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OVERVIEW
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5. Understanding Accounting
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11. Recap
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12. Elements of Accounting
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30. Recap
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32. Accounting Process
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37. Closing
Balance of a
Ledger
Account
Example
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41. Trial Balance
Report
Sample
Trial Balance Report Accounts Debits Credits
Cash $26,300
Accounts receivable $3200
Land $15000
Accounts payable $500
Notes payable $10000
Capital stock $25000
Service revenues $12000
Advertising expense $2000
Utilities expense $1000
$47,500 $47,500
Assets
Expenses
Liablities
Equity
Total
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43. Trading
account
calculations
Gross profit = (Net Sales + Direct
Revenue + Opening stock) – (Net
Purchases + COGS + Closing Stock).
OR
Net Sales + Direct Revenue + Opening
Stock – Net purchases – COGS – Closing
Stock
Trading account calculations gives us the
Value of Gross Profit.
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45. Example of
Profit & loss
format
Sales 50000
Less Sales returns 1000
Interest received (Other Income) 2000
51000
COGS 20000
Depreciation 500
Rents Paid 4000
Interest Expense 250
Utilities Expenses 500
25250
25750
Net Income
ABCXYZ Corporation
Income Statement for the year ending 31/03/XX
Total Revenue:
Total Expenses
Revenues
Expenses
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48. Example of
Balance
sheet format
Current assets 55000
Cash 20000
Accounts receivable 4000
Prepaid building rent 1000
Total current assets 80000
Long Term Assets 2000
Equipments 2200
Less Depreciation 1000
Total Long Term assets 3200
83200
Liabilities
Accounts payable 15000
Salaries payable 2000
Income tax payable 1200
Total liabilities 18200
Shareholders Equity
Capital Stock 53000
Retained Earnings 12000
Total Shareholder equity 65000
83200
Assets
Liabilities & Stockholders' equity
Total Assets
Total Liabilities + Shareholders equity
Assets = Liabilities + Equity.

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50. Cash flows
from
Operating activities
Cash from
Revenues
Cash paid for
operating expenses
Cash flows relating
to
investment activities
Cash flow related to
purchasing and
selling of PP&E
Investing in other
business, banks,
etc.
Cash flows relating
to
financial activities
Cash flow for
issuing shares,
paying dividends or
purchasing shares
Cash flow from
raising debt, or
repaying debt etc.
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51. Cash flows
from
Operating activities
Cash from Revenues
Cash paid for
operating expenses
Cash flows relating
to
investment activities
Cash flow related to
purchasing and
selling of PP&E
Investing in other
business, banks, etc.
Cash flows relating
to
financial activities
Cash flow for issuing
shares, paying
dividends or
purchasing shares
Cash flow from
raising debt, or
repaying debt etc.
Cash Movement
Net Cash flow
From Financial
activities
Net Cash flow
From Investment
activities
Net cash flow
from Operating
activities
=
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52. Example of
Cash flow
statement
A1
B1
C1
D1
0
-28,000
67,200
39,200
11,71,650
-1,120
-1,12,000
-84,000
-8,400
-1,49,520
0
-1,400
-12,880
43,680
-25,200
1,33,000
0
12,00,000
2018
Amount
1148970
1,42,800
1,120
-15,120
-1,86,900
0
0
-35,000
84,000
49,000
-1,750
-16,100
54,600
-31,500
1,66,250
0
2019
Amount
1171650
1,78,500
1,400
-18,900
-1,400
-1,40,000
-1,05,000
-10,500
0
70,000
0
56,000
Ending Cash balance(A1+B1+C1+D1) for the year
Net Cash flow from Investing activities
Cash Flow from Financing activities
Debt paid
Cash flow for issuing shares
Net Cash flow from Financing acitivites
Cash Flow from Investing Activities
Sale of a Building
Fixed Assets: Computer Equipment
Fixed Assets: Machinery & Equipment
Fixed Assets: Leasehold Improvements
Fixed Assets: Other Intangible Assets
+/- Interest Expense
+/- Security Deposit (Net)
+/- Accounts Payable
+/- Deferred Revenue
Net Cash flow from Operating activities
1,20,000
70,000
12,40,500
Beginning Cash balance
Cash Flow from Operating Activities
Net Income
+/- Prepaid Expenses
+/- Prepaid Rent
-1,50,000
-15,000
-2,67,000
-50,000
2,37,500
1,00,000
-2,000
-2,00,000
2,000
-27,000
-2,500
-23,000
78,000
-45,000
Financial Year Ending 31 March 2020
1200000
2,55,000
Amount
Company : ABCDE
Cash Flow Statements
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53. Recap .
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54. Quite a bit of ground covered in Accounting subject
Snapshot of what you learnt!
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55. Final Comments
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