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WHAT IS ACCOUNTING

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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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