SU 1 -Introduction to the accounting
environment
Accounting records:
What are accounting records?
Complete record (evidence) of all transactions the entity entered.
Purpose and need:
Information (either manual/computerised) on assets, liabilities,
revenue, expenses, equity, etc.
Used for:
o Recording transactions
o Compiling financial statements
o Decision-making
o Performance measurement
o Legal accountability
o Tax purposes
Examples of accounting records?
Internal sales order
Delivery notes
Sales invoice
Sales journal and debtor’s ledger
General ledger (GL)
Trial balance (TB)
Annual financial statements (AFS)
Financial Statements:
What are financial statements?
Reports compiled by an entity which details the company’s financial
activities and overall performance and health.
Components of financial statements:
Statement of financial position (SoFP)
Statement of profit or loss and other comprehensive income
(SPLOCI)
Statement of changes in equity (SoCE)
Statement of cash flows
Notes to the financial statements
Other reports and disclosures
environment
Accounting records:
What are accounting records?
Complete record (evidence) of all transactions the entity entered.
Purpose and need:
Information (either manual/computerised) on assets, liabilities,
revenue, expenses, equity, etc.
Used for:
o Recording transactions
o Compiling financial statements
o Decision-making
o Performance measurement
o Legal accountability
o Tax purposes
Examples of accounting records?
Internal sales order
Delivery notes
Sales invoice
Sales journal and debtor’s ledger
General ledger (GL)
Trial balance (TB)
Annual financial statements (AFS)
Financial Statements:
What are financial statements?
Reports compiled by an entity which details the company’s financial
activities and overall performance and health.
Components of financial statements:
Statement of financial position (SoFP)
Statement of profit or loss and other comprehensive income
(SPLOCI)
Statement of changes in equity (SoCE)
Statement of cash flows
Notes to the financial statements
Other reports and disclosures
