Scribd
Upload
18 views

Chapter 2 Journalizing 2

asadadASaasdadadadada

Uploaded by

kakao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
18 views

Chapter 2 Journalizing 2

asadadASaasdadadadada

Uploaded by

kakao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 19

PRAYER BEFORE YOU

START WITH THE


LESSON
THE ACCOUNTING
EQUATION AND THE
DOUBLE – ENTRY
SYSTEM
ACCOUNTING INFORMATION
SYSTEM
Accounting
Process

Economic Accounting
Activities Information

Decision Makers
FINANCIA
❑Asset – a present economic resource controlled by
L the entity as a result of past events. An economic
STATEME resource is a right that has the potential to produce
economic benefits
NT ❑Liability – a present obligation of the entity to
transfer an economic resource as a result of past
2018 events.
❑Equity – the residual interest in the assets of the
CONCEPT entity after deducting all its liabilities
UAL ❑Income – increases in assets or decreases in
liabilities that result in increases in equity, other than
FRAMEW those contributions from holders of equity claims

ORK FOR ❑Expense – decreases in assets or increases in


liabilities , that result in decreases in equity, other
FINANCIA than those relating to distributions to holders of
equity claims
L
❖The basic summary device of accounting is the account
❖A separate account is maintained for each element that
appears in the balance sheet and in the income statement
❖Detailed record of the increases, decreases and balance of
each element that appears in the financial statements
❖It has three parts:
THE
ACCOUNT
THE
ACCOUNTI
NG
EQUATION
DEBITS AND CREDITS – THE
DOUBLE ENTRY SYSTEM
❖Accounting is based on a double entry system which means that the dual effects of a
business transaction is recorded. A debit side entry must have a corresponding credit
side entry. The total debits for a transaction must always equal the total credits
❖An account is debited when an amount is entered on the left side of the account and
credited when an amount is entered on the right side
SUMMARY ON RULES OF DEBIT
AND CREDIT
NORMAL BALANCE OF AN
ACCOUNT
TYPES AND EFFECTS OF
TRANSACTIONS
❖Source of Assets (SA) – An asset account increases and a corresponding claims
(liabilities or owner’s equity) account increases
❖Exchange of Assets (EA) – One asset account increases and another asset account
decreases
❖Use of Assets (UA) – An asset account decreases and a corresponding claims
(liabilities or owner’s equity) account decreases
❖Exchange of claims (EC) – One claims (liabilities or owner’s equity) account
increases and another claims (liabilities or owner’s equity) account decreases.
EXERCISES
COMPUTE THE AMOUNT OF
THE MISSING ELEMENT OF
FINANCIAL POSITION
USE THE ACCOUNTING
EQUATION TO ANSWER EACH
OF THE QUESTIONS

You might also like