Grade 10 Accounting Notes

• Grade 9 Revision
• Accounting Concepts
• Cash Journals
• General Journal
• Salaries and Wages
• Final Accounts
• Credit Sales and Allowances
• Value Added Tax (VAT)
• Credit Purchases and Allowances
• Ethics
• Financial Statements
• Analysis and Interpretation of Financial Statements
• Internal Controls
• Classification of Ledger Accounts

,• ACCOUNTING EQUATION
- ASSETS – LIABILITIES = OE

• HISTORICAL COST RULE
- Assets are always reflected at their original cost price

• ASSETS
- Possessions of the business

• LIABILITIES
- Amounts the business or an individual owes

• OWNER’S EQUITY
- The owner’s net investment in the business

• PRUDENCE CONCEPT
- Be conservative and realistic in disclosing of information

• CONCEPT OF MATERIALITY
- Items that are of importance must be treated separately

• DOUBLE ENTITY PRINCIPLE
- For every debit there is a corresponding credit

• MORTGAGE LOAN
- Money borrowed in order to buy property

• INVESTMENTS
- Money tied up for a period of time, to earn a higher return

,• BUSINESS ENTITY RULE
- Business and owner’s affairs must be kept separate

• BALANCE SHEET
- Statement showing financial position of business at a time

• CAPITAL
- Money invested by the owner in the business

• DRAWINGS
- Money withdrawn by the owner in the business

• EXPENSES
- Items that are paid for but have no lasting value

• INCOME
- Sources of earnings to the business




Owners’ equity
A Capital, Income (+)
-
Drawings, Expenses (-)
OE L
+

,