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Financial Accounting: Basic Elements of Accounting
Financial Accounting: Basic Elements of Accounting
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Basic Elements of
Accounting
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1.
2.
3.
4.
5.
Assets
Liabilities
Owners Equity
Revenue
Expenses
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Assets
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Current Assets
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Fixed Assets
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Liabilities
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Owners Equity
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Revenue
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Expense
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Financial Accounting
Terminologies used in Accounting
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Accounting
Terminology
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Transaction:
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Accounting
Terminology
Voucher: A written evidence in support of
a transaction is called Voucher. whenever a
transaction takes place, voucher is
prepared which can be used as a basis for
recording transaction as well as it is a
written proof of a transaction.
Account:
A summarized record of a
business transaction is called an account.
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Accounting
Terminology
Merchandise (Goods):
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The things or
items bought or sold by a business in order
to earn profit are called merchandise or
goods. For example, a seller buys book with
the intention to resale it , so these books
can be called merchandise.
Purchases: Goods or services, equipment
and other items brought for the business
are called purchases.
- Cash purchases: when goods are
purchased on cash.
- Credit purchases: when goodsHigher
are
Education with
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Accounting
Terminology
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Accounting
Terminology
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Accounting
Terminology
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Notes Receivables:
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Accounting
Terminology
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Accounting
Terminology
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Accounts Payable(Creditors):
The
Drawing:
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Accounting Terminology
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Debit:
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Accounting Terminology
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Data base:
A storage system of
information within a computer- based
accounting system.
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Accounting
Terminology
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Single Entry:
Double Entry:
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Accounting
Terminology
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Financial Statement:
The principal
means of reporting general-purpose
financial information to persons outside a
business organization is a set of accounting
reports called financial statements.
Note: a complete set of financial statements
includes: A Balance sheet, An income
statement, A statement of owners equity
and A statement of cash flows.
Higher Education with
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Accounting
Terminology
Balance Sheet:
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showing at a specific
date the financial position of the company
by indicating the resources that it owns ,
the debts that it owes, and the amount of
the owners equity (investment) in the
business.
Income Statement:
indicating the
profitability of the business over the
preceding year (or other time period).
Higher Education with
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Accounting
Terminology