Examples of
source documents
Kept on file for proof that a
transaction occured
Always on the
RIGHT
Always on the
LEFT
For complete satisfaction,
balance all of your transactions!
Trial Balance is used
to see if the ledger is
mathematically correct
A ledger can be in the
form of a T-Account
Accounting for a business
should be fair. Use realistic
numbers and don't understate or
overstate.
Accounting recorded
from objective evidence
Accountants must record the
value at the original price
regardless of market value.
Assumes a business will
continue to operate unless
known it will not.
Accounting for a business
must be separate from the
owner's personal affairs
Things that directly
affect OE
Examples of Liabilities
Examples of Assets
The "OE" of the equation.
What the ownership claims on total assets.
What remains after all liabilities are paid off
The "L" of the equation.
Debts and obligations that
the business owes.
The "A" of the equation.
Resources owned by a business.
Things of value used in carrying out
activities.
Fundamental equation
for finding balances and reports
on profits and losses
Business which is an individual in the eyes of the law
Unincorporated business owned by more than one individual
Unincorporated business owned by a single person
Holds activities for social benefit, not profit
Buys manufacturers items and resells them at a higher price
Combines effort + material to make a new product
Sells effort not resulting in material items
Events that occur that
change financial position
Group of accounts
Use of accounting data
for showing CHANGES in
financial position
Specific rules and procedures that
accounting follows. 5 of them have
been reviewed. Used in all forms of
accounting data.
One of the most important uses
of accounting showing
financial position
All businesses fall into 4 general categories
Total debits must
equal total credits
Transactions are recorded in Transaction
Analysis sheets
Transactions are recorded in Balance Sheers
Equation is vital when completing a
Transaction Analysis sheet
Changes in ledgers
are caused by
transactions
