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1a Basic Accounting-Assets-Lesson Material

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16 views

1a Basic Accounting-Assets-Lesson Material

Uploaded by

Rashid Usman
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Basci Accounting (Assets, Liabilities & Capital)-Lesson-01

Notes

What is account?
Account is a technical device which is used by the accountant to record increase
or decrease in any item of assets, liabilities, capital, expense and revenue. These
are called five pillars of accounts.

What is Asset?
Resources owned by the business.

Types of Assets:
1. Current Assets or Current Resource
2. Fixed Assets or Fixed Resource

Current Assets
Current Resources or Current Assets are that assets or resources which is utilized
by the business normally in a year.
Examples
1. Cash in Hand / Cash
The availability of cash for the business, utilized it within a year without any
legal obligation.
2. Cash at Bank / Bank:
The cash available in the Bank for the business utilization. It require legal
obligation to use it & we found changes in it within a year.
3. Debtors / Accounts Receivables
A person who owes money to a business for goods or services supplied.
4. Stocks / Inventory
Goods in which the business normally deals that are held with the intention of
resale. It may be finished goods or partly finished goods or raw materials.
5. Supplies / Office Supplies
Supplies refers to the stationary, equipment’s & other consumable items
regularly used in office. It is utilized within a year.
6. Prepaid / Advance
Business making advance payments for goods or services to be received in the
future.

Fixed Assets
Fixed Resources or Fixed Assets are that assets or resources which is utilized by
the business normally over a year.

Examples
1. Land
It is also called real property. It is the earth on which the company's office
buildings or manufacturing facilities available.

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Basci Accounting (Assets, Liabilities & Capital)-Lesson-01
Notes

2. Premises & Building


Premises refers to the building owned by the business. Building refers to the
space from which the business being carried out.
3. Furniture & Fixtures
Are larger items of movable equipments that are used to furnish an office. Like
bookcases, chairs, desk, filing cabinets & tables.
4. Equipments
It includes copiers, computers, printers, fax machines, etc.
5. Plant & Equipment
Heavy & light machinery used by the business to produce their goods & services.
6. Motor Vehicle
It includes company's automobiles, trucks and fleets used for commuting or
transferring of goods or services by the business.
7. Investments
An investment is a payment made to acquire the securities of other entities, with
the objective of earning a return. Examples are bonds, common stock, and
preferred stock.

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