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WHAT IS ACCOUNTING

WHAT IS ACCOUNTING. RECORDING CLASSIFYING SUMMARIZING EVALUATING COMMUNICATING. ACCOUNTING EQUATION. The whole of accounting is based on accounting equation. Resources in the business. Resources supplied by the owner. =. The totals of each side will always equal one another.

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WHAT IS ACCOUNTING

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  1. WHAT IS ACCOUNTING RECORDING CLASSIFYING SUMMARIZING EVALUATING COMMUNICATING

  2. ACCOUNTING EQUATION The whole of accounting is based on accounting equation. Resources in the business Resources supplied by the owner =

  3. The totals of each side will always equal one another ASSETS = CAPITAL + LIABILITIES

  4. The Balance Sheet The accounting equation is shown in a statement called the Balance Sheet. Example: On 1 May 19-7 H.Chung started in business and put $5000 into a bank account for the business. Assets Capital

  5. EXERCISE On 10 May 19-7 H.Chung buys goods for $500 and agree to pay it later (buy on credit). A person to whom money is owed for goods is known in accounting language as a creditor H.Chung also sold goods for $100 and agree to pay it later. A person who owns money to the firm is known in accounting language as a debtor.

  6. ANSWER The balance sheet now appears as: Stock of goods=500-100

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