First

year

Accounting one
chapter 1&2&3

( BIS /FMI ) Romario Khaled

2023 01271535731
01149154059
 First year Accounting 1
Chapter One ) ‫(نظرى‬
Accounting definition :
- Is a information system to provide quantitative information with financial nature about the firm (
economic entity ) to help in decision making process . it is the langue of business

- it is a financial information system ‫ نظام معلومات مالى‬to process it .from data‫ بٌانات‬information ‫ معلومات‬to
information.
- that by three activities ‫ ( انشطة‬identifying ‫ التحدٌد‬- record ‫ التسجٌل‬- communicating ‫ ) التوصٌل‬. the economic
events ‫ االحداث االلتصادٌة‬of the organization ‫للمؤسسة‬
to interested users ‫ للمستخدمٌن‬.

Data Processing Information

(Daily Transactions ) (Financial Statement )

‫بٌانات مالٌة‬ ‫معلومات مالٌة‬

‫فى منها اللى ٌفٌدنى‬ ‫هستفاد منها‬
‫و البالى مش هستفاد منه‬

1- Identifying ‫التحدٌد‬ 2- Records ‫التسجٌل‬ 3-Communication

(Booking & classify & Summarizing) (matching)
the economic event record classify prepare accounting
(transactions) and summarize reports ‫تمارٌر‬
‫تحدٌد االحداث االلتصادٌة‬ ‫بتسجل و تلخص االحدث‬ communicate to users
‫اللى هستخدمها و لٌها عاللة بشركتى‬
Accounting is a process of identifying, recording, summarizing, and reporting
economic information to decision makers in the form of financial statements
The three main activates :
- Identifying involves the following :
a. Selecting economic activities relevant to the company. ‫اختار االحداث المؤثرة علٌا و اللً مش هتاثر استبعدها‬
- Recording involves the following :
a. Classifying economic events. ‫احدد هسجلها فٌن‬
b. Keeping ً‫ الحفاظ عل‬a systematic chronological ً‫ ترتٌب زمن‬diary of events.
c. Measuring ‫ لٌاس‬events in cents and dollars.
d. Summarizing economic events.
- Communicating involves the following:
a. Analyzing and interpreting ‫ تفسٌر‬information.
b. Preparing accounting reports.
c.. Reporting information in a standard format .

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 First year Accounting 1
- there were different between accounting and bookkeeping ( ‫) التسجٌل او الدفترة‬
Bookkeeping : usually involves only the recording of economic events.
It is therefore just one part of the accounting process.
Accounting : involves the entire process of identifying, recording, and communicating
economic events .
Test ( true or false).
1. The three steps in the accounting process are identification, recording, and communication. ( )
2. Bookkeeping encompasses ‫ تشمم‬all steps in the accounting process. ( )
3. Accountants prepare, but do not interpret, financial reports. ( )
Solution : 1 – True 2 - false 3 – false

2 - the accounting system consists of ‫ ٌتكون من‬:-

1 - the personnel ) ‫ الشخاص (الموظفٌن‬2- procedures ( ‫اجرات بتاخذوها ( الموانٌن اللى بٌستخدموها‬
3- devices ) ‫( ادوات‬ 4- records ( ‫( السجالت‬
3 -The Accounting Reports :

Internal reports (For internal users) External reports (external users)

Prepared to used by management of the General purpose statements mainly
company to plan and direct and control daily prepared for external but internal use
activities as : it
- Budget measurement (management accounting ) Financial Accounting
- Cost statement ( cost accounting ) ‫الغرض منها عام هتفٌد الناس اللى جوه الشركة و اللى‬
To performance evaluation ‫براها‬
‫ تمرٌر بتتعمل عشان المدٌرٌن ٌمدروا ٌدٌروا و خطتوا للعمل‬As :
‫الٌومى داخل الشركة و ٌمٌسوا و ٌمٌموا االداء‬ - financial position ‫الوضع المالى للشركة‬
- income statement ‫دخل الشركة‬
- Owners equity ‫حك المالن فى الشركة‬
Do not use (GAAP ) - cash flow ‫التدفك النمدى‬
‫و كلهم هناخدهم بالتفصٌل السنة دى‬
Must using GAAP
4 - Who uses the accounting reports ( data) output ?
Internal user ‫ناس جوه الشركة‬ External user ‫ناس بره الشركة‬
Decision maker ‫صناع القرار‬ Direct interest Indirect interest
(Owner & managers &Employees ) ‫استفادة مباشرة‬ ‫استفادة غٌر مباشرة‬
- finance ‫ادارة مالٌة‬ - investor ‫ مستثمر‬- customer ‫عمٌل‬
- human resources‫موارد بشرٌة‬ - creditor ‫دٌانة‬ - supplier ‫موردٌن‬
- labor union ‫اتحاد العمال‬
- management ‫االدارة العامة‬ - economic planner
- marketing ‫التسوٌك‬ and financial analysts
‫مخطط التصادى و مستشارٌن مالٌن‬

TRUE OR FALSE ?
4. The two most common types of external users are investors and company officers. ( )

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 First year Accounting 1
5. Managerial accounting activities focus on reports for internal users. ( )
Solution : 4 - false 5 – True

5 - Accounting profession ‫( مهنة المحاسبة‬Read Only )

Private accounting profession Public accounting profession
‫بتقدم خدمات محاسبٌة لشركة معٌنة‬
As : General accountant As : External auditor
Cost accountant Consultation agency
Cash control
Internal auditor
Tax accountant

LO2 : Explain the building blocks of accounting: ethics, principles,and assumptions.

1 - ETHICS : ‫هى اخالقٌات المهنة‬

2 - principles, and assumptions ‫المبادئ واالفتراضات‬

The General Accepted Accounting Principles (GAAP)( principles and assumption :
- Measurement Principles : ‫مبادئ القٌاس‬
1 - HISTORICAL COST PRINCIPLE
dictates ‫ اتفاق‬that companies record assets at their cost. This is true not only at the time
the asset is purchased, but also over the time the asset is held
. ‫تسجل اغلب االصول بمٌمتها التارٌخٌة لحظة الشراء و ال تتغٌر بمرور الزمن‬
‫ ٌعنى لو اشترٌت ارض هسجلها بمٌمتها السولٌة فى الولت اللى اشترٌته فٌها و لو اتغٌرت لٌمتها مع الزمن انا مش هغٌر‬-
‫حاجة عندى فى الدفاتر‬
‫ انا مش هغٌر حاجة و هفضل مسجلها ب‬033.333 ‫ و اخر السنى سعرها وصل‬033.333 ‫ مثال لو اشترت ارض لٌمتها‬-
033.333

2 - FAIR VALUE PRINCIPLE

assets and liabilities should be reported at fair value (the price received to sell an asset
or settle a liability). Fair value information may be more useful than historical cost for
certain types of assets and liabilities.
‫تسجل االصول و الدٌون بالمٌمة العادلة اي لٌمتها مع تغٌر الزمن‬

In our course we will apply cost principle not fair value principle.
The fair value principle ‫مش هنستخدمه خالص الترم ده‬

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 First year Accounting 1
- Assumptions :
1 - Economic Entity assumption:
Means that the business should be separated from the owner and other businesses.
Ex: the personal money of the owner should be separated from the money of the
business.
‫الشركة منفصلة عن مالكها ٌعنى كٌان مستمل بزاته من حٌث التعامالت المالٌة‬
Forms of business organizations:

2- MONETARY UNIT ASSUMPTION :

requires that companies include in the accounting records only transaction data that can
be expressed in money terms
‫ عربٌات‬0 ‫ جنٌه وانا بحسب العربٌات مش الول الشركة عندها‬033.333 ‫ ٌعنً الول مثال الشركة عندها عربٌات ب‬-
3 - Going Concern ‫)بٌفرضوا فرضٌة ان الشركة هتستمر و مش هتتباع و ال تمفل( االستمرارٌة‬
Consider ‫ تعتبر‬the business will continue ‫ تستمر‬operating instead of ‫ بدال من‬closed or sold .
4 - consistency ‫(هو استخدام نفس المبادئ المحاسبٌة بنفس الطرٌقة فى كل فترة محاسبٌة( الثبات‬
Refers ‫ تشٌر الى‬to the use ‫ استخدام‬the same accounting principles ‫مبادء المحاسبٌة‬
In the same way ‫ بنفس الطرٌمة‬in each accounting period ‫فى اى فترة محاسبٌة‬
5 - objectivity ‫الموضوعٌة‬
Business transactions that actually occurred should be records every accounting
transaction is to be supported by objective evidence which can be checked
‫كل المعامالت المحاسبٌة الذى ستسجل ٌجب ان تسجل مصحوبة بدلٌل موضوعى ٌمكن فحصه‬

TRUE OR FALSE ?

6 - The business applies the cost principle only when it is organized as a proprietorship. ( f )
7 - Cost principle states that items should be recorded at their market value. ( f )
8 - Stable monetary unit concept states that information should be verifiable. (f )
9 - Going concern concept states the resources of the owner should be separated from that of the
business. ( f )
10 - The historical cost principle dictates that companies record assets at their cost. In later periods,
however, the fair value of the asset must be used if fair value is higher than its cost. ( f )
11 - A business owner’s personal expenses must be separated from expenses of the business to
comply with accounting’s economic entity assumption. ( t )

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 First year Accounting 1

Chapter Two
The basic accounting equation:
Assets = Liabilities + Owner’s Equity
‫= االصول اللى بتملكها الشركة‬ ‫الدٌون و المتطلبات‬ + ‫حقوق المالك‬
OR

Assets = owners Equity

‫الشركة ممكن ٌكون معندهاش دٌون بس الزم بكون عندها مالك‬
Expanded Accounting Equation:

Assets = Liabilities + (owner’s capital – owner’s drawings

+ revenues – Expenses )

Assets = Liabilities + Owner’s Equity

+ cash ‫نقدٌة‬ + account payable Increase :
+ land ‫ارض‬ )‫حسابات دٌون بدون ورق (علٌا‬ + capital ‫راس مال‬
+ note payable + revenues ‫اٌرادات‬
+ cars ‫سٌارات‬
)‫حسابات دٌون باوراق (علٌا‬+ Decrease :
+ equipment ‫معدات‬ unearned revenues ‫اٌرادات‬ - Expenses ‫مصروفات‬
+ supplies ‫رفاٌع‬ ‫غٌر مكتسبة‬ ‫مصروفات من غٌرها مفٌش انتاج و بالتالى‬
+ machines ‫مكن‬ ‫حصلت على فلوس قبل اعمل الخدمة‬ ‫مفٌش ارباح وبتكون فى الماضى‬
+ Account/Note - Drawing ‫مسحوبات شخصٌة‬
Receivable
) ‫حسابات قابلة للتحصٌل ( لٌا‬
+ prepaid expenses
‫مصروفات مدفوعة مقدما‬
100 20 80
- We use it to identify and record the effect of transaction
- Any transaction have duel effect ‫تاثٌر ثنائى‬
‫ٌعنً اي عملٌة الزم تعمل علً االقل تاثٌرٌٌن‬
+ and -
+ OR - + OR -
+ OR - + OR -
+ -
+ + -
Two sides must be Equal if what happen Done

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 First year Accounting 1
1- Assets
are resources a business owns common characteristic of assets is the capacity to
provide future services or benefits.
‫ فٌها مٌزة ممٌزة‬assets ‫ٌعنى هى موارد الشركة اللى الشركة بتستخدمها لتمدٌم نشاطها سواء كان سلع وال خدمات كل ال‬
‫لٌها انها بتمدم فائدة او خدمة فى المستمبل‬
such as : ( cash . cars . land . equipments . building. machines . inventory ‫بضاعة‬
supplies . Accounting receivable ‫ فلوس لٌا عند العمالء‬-prepaid expenses ‫) مصروفات مدفوعة ممدما‬

2- Liabilities (are claims or obligations against assets) ‫دٌون او متطلبات مقابل االصول‬
usually borrow money and purchase merchandise on credit
‫مثال انا استلفت فلوس من بنن لرض مثال او ممكن اشترى عربٌة لسط للشركة او ٌكون علٌا التزام مثال تجاه الموظفٌن‬
‫او ٌكون علٌا ضرائب مثال‬. ‫مرتبات ٌعنى و مش معاٌا ادفعه دلولتى فٌعتبر ده دٌن‬

3- Owner’s Equity ( It is equal to total assets minus total liabilities)

‫حق مالك انشركة فً انشركة وده هيكىن بيساوي االصىل ناقص انذيىن ( راس مانهم و االيراد انهً بيجً نهشركة و انمصاريف‬
...) ‫انهً انشركة بتصرفها و انمسحىبات انشخصية انهً بيسحبها انمالك‬

Owner’s Equity Components

Increase owners equity (+) Decrease owners equity ( - )
+ owner’s capital. ( investment ) - EXPENSES
investments by owner are the assets the cost of assets consumed or services.
owner puts into the business. These investments that used in the process of earning
increase owner’s equity revenue
‫انفهىس انهً مالك انشركة بتذفعها فً انشركة فً بذاية اننشاط‬ ‫كانيف انهً انشركة بتتحمهها‬
Reinvestment ‫و كمان ممكن ٌعملوا‬ ‫ الرباح‬assets ‫ال‬
‫ و ده اما ٌزود فلوس تانى او ٌدخل االرباح تانى فى داٌرة‬- DRAWINGS ‫المسحوبات الشخصية الصحاب الشركة‬
‫ نشاط الشركة‬An owner may withdraw cash or other
+ )‫ (االٌرادات‬REVENUES assets for personal use
the gross increase in owner’s equity ‫صاحب الشركة ممكن ٌاخد فلوس من الخزٌنة او من المنتج‬
resulting from business activities ‫اللى بتنتجه الشركة غرض االستخدام الشخصى‬
‫واحد من الشركاء انفصل او انسحب‬

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 First year Accounting 1
Tabular Analysis
Analyze the effects of business transactions on the accounting equation
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.
TRANSACTION (2). Softbyte purchases computer equipment for $7,000 cash.
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
TRANSACTION (4). Softbyte receives $1,200 cash from customers for app development services
it has performed.
TRANSACTION (5). Softbyte receives a bill for $250 from the Daily News for advertising on its
online website but postpones payment until a later date.
TRANSACTION (6). Softbyte performs $3,500 of app development services for customers. The
company receives cash of $1,500 from customers, and it bills the balance of $2,000 on account.
TRANSACTION (7). Softbyte pays the following expenses in cash for September: office rent $600,
salaries and wages of employees $900, and utilities $200. These payments result in an equal
decrease in assets and owner’s equity
TRANSACTION (8). Softbyte pays its $250 Daily News bill in cash. The company previously [in
Transaction (5)] recorded the bill as an increase in Accounts Payable and a decrease in owner’s
equity.
TRANSACTION (9). Softbyte receives $600 in cash from customers who had been billed for
services [in Transaction (6)]. Transaction (9) does not change total assets, but it changes the
composition of those assets.
TRANSACTION (10) Ray Neal withdraws$1,300 in cash from the business for his personal use.

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 First year Accounting 1
Four financial statements and how they are prepared
Prepared at end of Accounting period ( Monthly / Quarter / Semiannual / Annual )
1 - Income statement (over given period )
2 - Owners’ Equity statement (over given period )
3 - Balance sheet or financial position (financial picture (snapshot ) on a given day)
4 - Cash flow statement (over given period )
1 2 3
Income statement Owners equity Balance sheet
) ‫قائمة الدخل( دخل الشركة‬ ‫حقوق المالك‬ ‫قائمة المركز المالى‬
Result Income or loss End capital of owner Financial position of business

Beg capital 5$ Assets = Lia + End capital

+ Additional 1$
How Revenues capital Assets Lia
To – Cash 2 $ A/P 1$
+ Income 2$
expenses Car 4$ N/P 1$
Pre- or
Income Loss Supplies1 $ U.REv 1$
pare Rev Rev - Loss A/R 2$
Exp Exp - Drawings (1$) Pre.exp 1$
Ending 7$ total 3$
The result of income capital Lia
statement moves to The result of Owners End 7$
Owners Equity as Equity moves to capital
income or loss Balance sheet as total L+OE 10$
Ending Capital assets 10$
A financial statement summarizes the reports the assets, liabilities,
that presents changes in owner’s and owner’s equity at a
Defin the revenues and equity for a specific specific date
expenses and period of time
- resulting net income or
ition net loss of a company
for a specific period of
time.
‫ده بمى تمرٌر بٌوضح ان الشركة‬ ‫تمرٌر بٌمٌس التغٌر فى حموق‬
‫بتكسب و ال بتخسر و ده بنجمع‬ ‫ راس المال زاد وال لل‬. ‫المالن‬
‫فٌه اٌرادات الشركة و نطرح‬
‫منها المصروفات‬
‫لو كان االرباح اكبر من‬
net ‫المصروفات ٌبمى‬
‫ و لو االرباح الل من‬income
net loss ‫المصروفات ٌبمى‬

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 First year Accounting 1
Financial statement ‫تعالً نعملها‬Example one ً‫ده ملخض للمثال اللً اخدناه الشٌت االوالن‬

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 First year Accounting 1
E1-6 Selected transactions for Green Valley Lawn Care Company are listed below.
1. Made cash investment to start business.
2. Paid monthly rent.
3. Purchased equipment on account.
4. Billed customers for services performed.
5. Withdrew cash for owner’s personal use.
6. Received cash from customers billed in (4).
7. Incurred advertising expense on account.
8. Purchased additional equipment for cash.
9. Received cash from customers when service was performed.
Instructions
describe the effect of each transaction on assets, liabilities, and owner’s equity.
Solution
1. Increase in assets and increase in owner’s equity.
2. Decrease in assets and decrease in owner’s equity. .(increase Exp )
3. Increase in assets and increase in liabilities.
4. Increase in assets and increase in owner’s equity.
5. Decrease in assets and decrease in owner’s equity.
6. Increase in assets and decrease in assets.(NO change in assets )
7. Increase in liabilities and decrease in owner’s equity.(increase Exp )
8. Increase in assets and decrease in assets. .(NO change in assets )
9. Increase in assets and increase in owner’s equity.

E1-7 Falske Computer Timeshare Company entered into the following transactions
during May 2017.
1. Purchased computers for $20,000 from Digital Equipment on account.
2. Paid $4,000 cash for May rent on storage space.
3. Received $17,000 cash from customers for contracts billed in April.
4. Performed computer services for Viking Construction Company for $4,000 cash.
5. Paid Tri-State Power Co. $11,000 cash for energy usage in May.
6. Falske invested an additional $29,000 in the business.
7. Paid Digital Equipment for the computers purchased in (1) above.
8. Incurred advertising expense for May of $1,200 on account.
Instructions
Indicate with the appropriate letter whether each of the transactions above results in:
(a) An increase in assets and a decrease in assets. (3)
(b) An increase in assets and an increase in owner’s equity. (4)
(c) An increase in assets and an increase in liabilities. (1)
(d) A decrease in assets and a decrease in owner’s equity. (2)
(e) A decrease in assets and a decrease in liabilities. (5)
(f) An increase in liabilities and a decrease in owner’s equity. (8)
(g) An increase in owner’s equity and a decrease in liabilities. (7)

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 First year Accounting 1
Very Important
‫ عادي هٌدٌك االجابات و انت هتختار‬MCQ ً‫ و االسئلة دي تٌج‬MCQ ‫االمتحان‬

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 First year Accounting 1
Chapter Three
The Recording Process
Simple Accounting cycle

Assets = Liabilities + Owner’s Equity

Rev Exp
Cap Draw

Debt (Dr) Credit Credit

Increase increase increase

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 First year Accounting 1
1 - Journalizing ( journal entry )
Journal Entry
Account Titles and explanation Ref Dr Cr
Cr ‫ و مٌن‬DR ‫شرح العملٌة اللى حصلت مٌن‬
‫ فوق شمال‬Dr ‫و طبعا ال‬ ‫(رلم الحسابات‬ ‫المٌمة‬ ‫المٌمة‬
Date ‫ تحت ٌمٌن‬Cr ‫و ال‬ ‫حاجة‬
Dr systematic
Cr ) ‫مش اكتر‬
‫اوعى تنسً ممكن ٌكون العملٌة لٌها اكتر من‬
‫طرف‬

2 - posting ( T - Account ) (General Ledger )

The general ledger ‫دفتر االستاذ العام‬

T- Account
Cash ‫اسم الحساب‬
Dr Cr

Balance

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 First year Accounting 1
PRACTICE Exercise

)adjusting trial balance) ‫ده هيشتغم معانا نحذ ال‬

Bob Sample opened the Campus Laundromat ‫ مغسهة‬on September 1, 2017. During the first month
of operations, the following transactions occurred. At September
1 Bob invested $20,000 cash in the business.
2 The company paid $1,000 cash for store rent for September.
3 Purchased washers and dryers for $25,000, paying $10,000 in cash and
s signing a $15,000, 6-month, 12% note payable.
4 Paid $1,200 for a one-year accident insurance policy.
10 Received a bill from the Daily News for online advertising of $200.
20 Bob withdrew $700 cash for personal use.
30 The company determined that cash receipts for laundry services for the
month were $6,200.
Instructions
(a) Journalize the September transactions. (Use J1 for the journal page number.)
(b) Open ledger accounts and post the September transactions.
(c) Prepare a trial balance at September 30, 2017.

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 First year Accounting 1

B-Ledger
REf Cash REF Account payable REF Prepaid insurance
DR CR DR CR DR CR
20.000 1.000 200 1.200
6.200 10.000
1.200
700
13.300 200 1.200

REf Drawing REF Capital REF Equipment

DR CR DR CR DR CR
700 20.000
700 20.000 25.000

REf Revenue REF Note payable REF Expenses

DR CR DR CR DR CR
6.200 15.000 200
1.000
6.200 15.000 1200

3 - Unadjusted Trial balance

Total DR must Equal CR

Account Title Dr CR
Cash 13.300
Prepaid Exp 1.200
Equipment 25.000
A/P 200
N/P 15.000
Capital 20.000
Rev 6.200
Adv.Exp 200
Rent exp 1000
Draw 700
41.400 41.400

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 First year Accounting 1
Problem 3-1
On April 1, 2018. Hesham started his business by depositing$100,000 in cash at the bank as capital The
following transactions occurred during the month:
April5 Borrow $20,000 cash from National bank Egypt.
April 8 Purchase a land with building for 120,000. Land cost is $50,000 and
building $70,000. Hesham paid $30,000 cash and signed a note payable for the
remaining balance to be paid after sixmonths.
April 10 Paid rent in cash $3,000.
April 15 Purchased office furniture for $6,000 on credit.
April 20 Purchased a computer for $4,000in cash.
April 25 Provided service for$12,000 cash and $7,000 on credit.
April 28 Paid the amount due to the furniture supplier in cash.
April 29 Hesham withdrew $2,000 in cash for personal use.
Required : journalizing / posting / trial balance
and prepare closing entry and prepare post closing trial balance

Date Account Title Dr Cr

1 Cash 100.000
Capital 100.000
5 Cash 20.000
N/P 20.000
8 Land 50.000
Build 70.000
Cash 30.000
N/P 90.000
10 Rent Exp 3.000
Cash 3.000
15 Furniture 6.000
A/P 6.000
20 Computer 4.000
Cash 4.000
25 Cash 12.000
A/R 7.000
Ser.Rev 19.000
28 A/P 6.000
Cash 6.000
29 Drawing 2.000
Cash 2.000

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 First year Accounting 1
Ledger
Cash Land Build Furniture's
100.000 30.000 50.000 70.000 6.000
20.000 3.000
12.000 4.000
6.000
2.000
87.000
A/R Computer A/P N/P
7.000 4.000 6.000 6.000 20.000
90.000
110.000

Capital Rev Exp Drawing

100.000 19.000 3.000 2.000
Trial Balance
Account Dr Cr
Cash 87.000
Land 50.000
Build 70.000
Furniture 6.000
A/R 7.000
Computer 4.000
A/P 0
N/P 110.000
Capital 100.000
Rev 19.000
EXP 3.000
Drawing 2.000
229.000 229.000

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 First year Accounting 1
- Closing Entry
At the end of the accounting period, the company makes the accounts ready for the next period. This is
called closing the books. In closing the books
the company distinguishes between temporary and permanent accounts.
- Temporary accounts : relate only to a given accounting period. They include all income statement
accounts and the owner’s drawings account. The company closes all temporary accounts at the end of
the period.
permanent accounts : relate to one or more future accounting periods. They consist of all balance
sheet accounts, including the owner’s capital account. Permanent accounts are not closed from period
to period. Instead, the company carries forward the balances of permanent accounts into the next
accounting period .

( Revenue – Expenses – Drawings ) ‫ بمفل الحسابات المؤلتة اخلٌها ب صفر ٌعنى و هى‬-
. ‫عشان دي حسابات مؤلته بتنتهى بنهاٌة الفترة اللى انا فٌها و مبتظهرش فى السنة او الفترة اللى بعدها‬

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 First year Accounting 1

Previous example data Closing entry

Date Account Title Dr Cr
rev Rev 19.000
Income Summary 100.000
exp Income summary 3.000
Exp 3.000
Income Income summary 16.000
summary Capital 16.000
Drawing capital 2.000
drawing 2.000
Post Closing trial balance

Account Dr Cr
Cash 87.000
Land 50.000
Build 70.000
Furniture 6.000
A/R 7.000
Computer 4.000
A/P 0
N/P 110.000
Capital 114.000
Rev 0
EXP 0
Drawing 0
224.000 224.000

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 First year Accounting 1

Correcting Entries

Identify the sections of a classified balance sheet.

Current assets : are assets that a company expects to convert to cash or use up within one year or its
operating cycle .
Long-term investments : are generally (1) investments in stocks and bonds of other companies that are
normally held for many years, (2) long-term assets such as land or buildings that a company is not currently using
in its operating activities, and (3) long-term notes receivable
Intangible Assets : Many companies have long-lived assets that do not have physical substance yet often are
very valuable. We call these assets intangible assets( goodwill, patents, copyrights, and trademarks )

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 First year Accounting 1
Current Liabilities : Current liabilities are obligations that the company is to pay within the coming year or its
operating cycle
Long-term liabilities : are obligations that a company expects to pay after one year.

Problem

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