Soran University

Faculty of Law, Political Science And

Management
Department of Accounting
First Stage

Accounting principles

Prepper by: lecture:

Armin Ehsan Salimkhan Mr. Faruq
Indad hamid abdullah
Muhammad mahfodh

2023-2024
Table of Contents
Accounting: .......................................................................................................... 2
Accountant : ......................................................................................................... 2
Busuness Ownership :.......................................................................................... 3
The Accounting Equation:- ................................................................................. 3
Assets .................................................................................................................... 4
Liabilities .............................................................................................................. 4
Owner’s Equity .................................................................................................... 4
Basic Calculations:............................................................................................... 5
What are financial statements? ........................................................................... 6
1. Balance sheet .................................................................................................... 6
2. Income statement ............................................................................................. 6
3. Cash flow statement ......................................................................................... 7
4. Statement of retained earnings........................................................................ 7
Reference:............................................................................................................. 8

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Accounting: Accounting is the process of recording, classifying, and
summarizing financial transactions of a business.

Identification: is the act of recognizing and naming someone or something.

Recording: The term "recording" can refer to the act of capturing audio or visual
information for future reference or playback.

Communication: is the process of transferring information from one place,

person, or group to another.

Accountant : Accounting is the process of consolidating financial information

to make it clear and understandable for all.

Role Of Accountant In Organizations:

• Financial Record Keeping:

• Financial Analysis:
• Budgeting And Planning:
• Tax Compliance:
• Auditing:
• Financial Reporting:
• Consulting:

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Business Ownership :
• Proprietorship: t seems that there might be a misunderstanding in the
question. The term "proprietorship" does not appear to be a standard word or
concept in accounting or business.
• Partnership: A partnership in business is a formal agreement made by two
or more parties to jointly manage and operate a company.
• Corporation: A corporation is a legal entity that is separate and distinct from
its owners. It is created by individuals, stockholders, or shareholders with the
purpose of operating for profit.

The Accounting Equation:- : The accounting equation states that a

company's total assets are equal to the sum of its liabilities and its shareholders'
equity.

Assets: assets are resources a business owns. The business uses its assets in

carrying out such activities as production and sales.

Liabilities: are claims against assets—that is, existing debts and obligations.

Businesses of all sizes usually borrow money and purchase merchandise on credit.

3
Owner's equity: also known as shareholder's equity or capital, represents the
residual interest in the assets of a company after deducting liabilities. It reflects the
owner's or shareholders' stake in the business.

Assets
I. Cash: Money in your wallet, bank accounts, or certificates of deposit.
II. Real estate: Land, buildings, and homes that can be bought or sold.
III. Vehicles and machinery: Cars, trucks, and other equipment that can be
used for transportation or production.

Liabilities
I. Accounts payable: Money owed to vendors or suppliers for goods or

services purchased on credit.

II. Loans: Money borrowed from a bank or other financial institution that must
be repaid with interest.

III. Payroll taxes: Taxes owed to the government on employee wages.

Owner’s Equity
I. Expenses: are the cost of assets consumed or services used in the process
of earning revenue.

II. Withdraw: An owner may withdraw cash or other assets for personal use.
III. Capital contributions: Money or assets contributed to a business by the
owner.

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Basic Calculations:
Transactions of Ali Company
April-1: Ali invests $20,000 cash to start the business.

April-3: Purchased supplies paying $1,000 cash.

April-7: Purchased equipment for $15,000 cash.

April-9: Purchased Supplies of $200 and Equipment of $1,000 on account.

April-18: Borrowed $4,000 from Int. Kurdistan Bank.

April-25: A withdrawal of $500 is made by the owner.

5
What are financial statements?
Financial statements are a set of documents that show your company’s financial
status at a specific point in time. They include key data on what your company
owns and owes and how much money it has made and spent.

There are four main financial statements:

• balance sheet
• income statement
• cash flow statement
• statement of retained earnings

Financial statements may be prepared for different timeframes. Annual financial

statements cover the company’s latest fiscal year. Companies may also prepare
interim financial statements on a monthly, quarterly or semi-annual basis.

1. Balance sheet
The balance sheet shows what the company owns and how much it owes at the end
of the period. It is based on the equation:

Assets = Liabilities + Shareholders’ Equity

2. Income statement
An income statement shows the profitability of your business. It details how much
money your business earned and spent. The income statement is also sometimes
referred to as a profit-loss statement or an earnings statement.

It shows your:

• revenue from selling products or services

• expenses to generate the revenue and manage your business
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 • net income (or profit) that remains after your expenses

3. Cash flow statement

The cash flow statement, sometimes called a statement of changes in financial
position, shows how money has moved through your business during the period.

4. Statement of retained earnings

The statement of retained earnings shows the cumulative earnings of the business
after any dividends or distributions to shareholders. As well, this statement,
sometimes called a statement of changes in equity, also shows the change in the
retained earnings account between the opening and closing periods on each balance
sheet.

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Reference:
• Needles Jr, Belverd E. Principles of accounting. Northwestern University, 2011.
• Weygandt, Jerry J., et al. "Accounting principles." Issues in Accounting Education 25.1 (2010):
179-180.
• Sanders TH, Hatfield HR, Moore W. Statement of accounting principles.
• Barth, Mary E. "Including estimates of the future in today's financial statements." Accounting
Horizons 20.3 (2006): 271-285.
• Subramanyam, K. R. Financial statement analysis. McGraw-Hill, 2014.
• Hasanaj, Petrit, and Beke Kuqi. "Analysis of financial statements." Humanities and Social Science
Research 2.2 (2019): p17-p17.