American International University – Bangladesh

BBA 1102
Principles of Accounting
Session 1
 COURSE INSTRUCTOR

Mohammad Zakaria Masud

Associate Professor
[PhD (Aus), FCMA (ICMAB), MBA (DU), BBA (DU)]

zakaria.masud@aiub.edu
 TEXTBOOK

Weygandt, J. J., Keiso, D. E., and Kimmel, P. d.,

Financial Accounting, 3rd Edition (2019) IFRS edition,
Wiley & Sons, Inc., USA.
 ASSESSMENT

[Tentative Allocation]
Class Tests (3+3) : 20% marks
Pop-up Quizzes : 20% marks
Participation : 10% marks
Assignment : 10% marks
VIVA : 15% marks
Closing assessment : 25% marks
 When you are in this class …..

Remember:
▪ You are the accountant of an organization
▪ Owners are simply the investors and stay
outside the organization
▪ Think always about the financial changes
resulted by a transaction (e.g., whether an
asset increase/decrease by an event?)
DISCUSSION TOPICS

▪ What is accounting?
▪ Three activities in accounting.
▪ Users of accounting information.
▪ Qualitative characteristics of information.
▪ Financial Statements.
▪ Key factors in financial accounting.
▪ Golden rule of debit and credit.
▪ Double entry system.
 Think of a business !!!

Suppose PQS purchase furniture from different manufacturers and sale it in their
shop in Panthapoth, Dhaka. Mr. P is the owner of the business and invested Tk.
25 lac to start the business. PQS also took a loan of Tk. 10 lac from Dhaka Bank
Limited to finance its planned activities. You are the accountant of PQS.
 ACCOUNTING
Accounting is the Accounting is an
language of business information system
 Data (I) Processing (P) Information (O)
Organized, meaningful and
Transaction:
useful data
Events that has financial effect
Query Reports, On demand Reports
and Periodic Financial Statements
(Income Statement, Owner’s Equity
Statement, Balance Sheet, Cash Flow
Data Info.. Statement)

Internal Users [Managers]

External Users [others]
Data and
Information Qualitative Characteristics of Information: Relevant, Reliable, Complete,
Storage Timely, Understandable, Verifiable
 Financial Statements

Income Statement Owner’s Equity Statement

[comparison of income and expenses to identify [a statement showing changes in owner’s claim in the
profit of the business] business]
I&E OE

Balance Sheet Cash Flow Statement

[a statement of assets and liabilities of the business [a statement showing changes in cash from different
on 7. Financialdate]
a particular business activities]
A Statements
&L Cash
 Self assessment

Q1: In accounting, which of the following statement is true?

a) You should consider yourself as the accountant of an organization
b) Owners are outsiders
c) As an accountant you should always think about the financial
changes resulted by a transaction
d) All the given statements are true
Key Factors
 BALANCE SHEET

Assets Provide FUTURE Benefits

Liabilities Obligation that results FUTURE payments

PRESENT PRESENT

Expense Consumed Benefits [PAST]

Income Earned claim by performing job [PAST]

INCOME STATEMENT
Golden Rule of Debit and Credit
 Generally Accepted Accounting Principles (GAAP)

L.H.S R.H.S
Summary
DEBIT (Dr.) CREDIT (Cr.)
Debit Credit
Expense Income (Dr.) (Cr.)

DECREASE INCREASE
DECREASE INCREASE

Asset (A) +
+ -
Assets Liabilities Expense (E) + -
Liability (L) - +
+
Expense Income Income (I) - +
+
Assets Liabilities TIPS
CREDIT (Cr.) DEBIT (Dr.) AE  Dr.
Cash  Dr.

Assets Liabilities Expense Income