W3 - ACCOUNTING EQUATION & FINANCIAL STATEMENT

W3 - ACCOUNTING EQUATION & FINANCIAL STATEMENT -...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
    ACCOUNTING  STATEMENT
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
CONCEPT The accounting system reflects 2 basic aspects of a company: what it owns and what it owes. ASSETS ???? what it owns LIABILITIES ???? what it owes EQUITY ???? what it owes Therefore: ASSETS = LIABILITIES + EQUITY
Background image of page 2
EXPANDED ACCOUNTING  EQUATION Withdrawal and expenses reduced equity. EQUITY = CAPITAL – WITHDRAWAL + REVENUE - EXPENSES Therefore; ASSETS = LIABILITIES + CAPITAL – WITHDRAWAL + REVENUE - EXPENSES
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
EXPANDED ACCOUNTING  EQUATION REVENUE. ASSETS + EXPENSES = LIABILITIES + EQUITY + REVENUE
Background image of page 4
BUSINESS ACTIVITIES External transactions – exchanges of value between two entities Internal transactions – exchanges within entity Events – can be reliably measured All the above will affect an entity’s accounting equation and leave the equation in balance .
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
On 1 December, Suhaimi forms a consulting business, Suhaimi Ent. Suhaimi personally invests RM30,000 cash in the new company. ASSETS
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/24/2011 for the course ACCOUNTING 101 taught by Professor Abraham during the Spring '11 term at Abraham Baldwin Agricultural College.

Page1 / 18

W3 - ACCOUNTING EQUATION & FINANCIAL STATEMENT -...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online