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Intro to Accounting 121

Intro to Accounting 121. Mr. R.G. Arendse Office 2.10 (2 nd floor EMS) (021) 959 - 2489. Lecture Programme. Course Outline Tutorials and Tutors Expectations. Introduction to accounting. Accounting started for the purpose of keeping records. Using past data. Accounting Def:.

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Intro to Accounting 121

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  1. Intro to Accounting 121 Mr. R.G. Arendse Office 2.10 (2nd floor EMS) (021) 959 - 2489

  2. Lecture Programme • Course Outline • Tutorials and Tutors • Expectations

  3. Introduction to accounting • Accounting started for the purpose of keeping records. • Using past data

  4. Accounting Def: • Accounting is the process of measuring, recording, classifying and summarizing financial information that is used in making economic decisions.

  5. What is a Entity? • An Entity - refers to any individual or organization which has an identity of its own

  6. Types of Businesses based on activity

  7. Forms of Ownership • Sole Trader • Partnership • Close Corporation • Private Company • Public Company

  8. Forms of Ownership

  9. Sole Trader • Only one (1) owner • Responsible for the daily activities of the business • Examples: Plumber, Hairdresser etc… • The owner is liable in his or her own personal capacity

  10. Partnership • All partners are owners • 2 – 20 Partners • Examples: Attorney’s, Accountants • The individual partners are liable in their own personal capacity for the debt.

  11. Close Corporation • 1 – 10 members • Own legal personality and it exits independently of its members • Member are actively involved in the daily running of the business • The letters C.C should be denoted • Example: Time-Travel c.c • Relatively easy and inexpensive to start

  12. Companies • A company is a business that may be owned by a few or by thousands of people known as shareholders • Two (2) Types of companies • Public (Listed on the JSE) denoted Limited “Ltd”7– no. of shares available • Private (Non listed companies) denoted Proprietor limited ‘Pty Ltd’ 1 - 50

  13. Users of Accounting Information • Accounting strives to produce information for the purpose of the end user. • Who typically users this information? • We deal with each user individually and why the need for the information.

  14. The need for Financial Records • Management – Management requires information of a financial nature to keep track of what is happening within a business entity for planning • The owners – To assess how effective management has been in implementing decisions and to determine future investment.

  15. Government – Government require information to determine the taxes due. • Employees – Employees require the information to determine the job security, perhaps salary increases. • Customers and suppliers – To assess whether their source of supply will continue

  16. Competitors – Competitors would naturally want to know as much as possible about the entity • The general public – concerned about social impact on the society

  17. Mutually Exclusive & Collectively Exhaustive • 1) Each item to fit into only one category • Example: Names sorted alphabetically • 2) Every item placed into an existing category • Example: Alphabetical naming A – Z

  18. Accounting system • ACCONTING EQUATION • JOURNAL ENTRIES • GENERAL LEDGER • TRIAL BALANCE • INCOME STATEMENT • BALANCE SHEET • (relevant notes)

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