Accounting = Book Keeping

Record business transcations

Raw Data --> Information
Recording the business tran
Accounting Cycle = 1. Journal 2. Ledger 3. Trail Balance
Journal Entries
SR#

2
 Recording the business transactions Classify
Journal Entries Ledger (Cash)
Transcation Dr Cr Dr

Purchazed Raw material for Cash $10,000

15000
(Raw Material to Cash)

Raw Material 10,000 5,000

to
10,000
Cash
Sold an equipment for cash $ 15,000 Ledger (Raw Material)
Cash 15000 Dr
to 10,000
Equipment 15,000 10,000

Ledger (Equipment)
Dr
 Classify Organize
Ledger (Cash) Sr# Entry Dr Cr
Cr 1 Cash 5,000

10,000 2 Raw material 10,000

3 Equipment 15,000

Total 15000 15000

Ledger (Raw Material)

Cr

Ledger (Equipment)
Cr
15,000
15,000
 Assets = Resources
Liabilities = Obligations / Payables
Owners' Equity = Owners' contribution to the business (Proportion to the total worth) / Shareholders

Shareholder/stockholders and stakeholders? (Shareholder/stockholders = Owners, Stakeholders = Any

entity who is being effected by our busisness directly or imdirectly)

Accounting Equation? (Accounting Equation) Asset = Liabilties + Owners' equity

Financial Statements = Balance sheet, Income statement, Cash flow statement and statement of changes
in retained earnings
Balance Sheet = Financial position of an organization for a specific period. What is the
foundation of a balnce sheet? The foundation is accounting equation

Income Statement: It summarises the revenue and expenditures of a busniess for a specific period

Revenue/sales for a manufacturing firm? Number of units sold * per unit selling price
Assets Liabilities Owners equity

100,000 84000 16000 0.84

16,000

Assets Liabilities Owners equity

200,000 84000 16000

200000 184000 16000 0.92

Units sold per unit selling price Revenue

100 $ 15.00 $ 1,500.00