Summary Grade 10_Accounting Noteset

Accounting

, BASIC PRINCIPLES
9( EQUATION:
THE [GENERAL] ACCOUNTING

ASSETS [A] = OWNER'S INTEREST [E] + LIABILITIES [L]
ASSETS OWNER'S INTEREST Liabilities

Dr. A Cr. Dr. E Cr. Dr. L Cr.
+ - - + - +




NON-OPERATING ASSETS Dr. Withdrawals Cr. NON-CURRENT LIABILITIES
+ -
Tangible / fixed assets (to be paid back over 12
months)
• Land and Infrastructure
• Equipment • Mortgage loan
Dr. Capital Cr.
• Vehicles • Loans
+ -
Financial assets

• Fixed deposit (longer than 12 CURRENT LIABILITIES
months) Dr. Expenses Cr. (will be paid back in less than
+ - 12 months)
u Cost of sales
CURRENT ASSETS u Interest expense • Trade creditors
u Rental expense • Overdraft Bank (Cr.)
Inventory
u Salaries and loans • Short term portion of
• Trading inventory u Stationery loan
u Fuel
u Packaging material
Trade and other receivables u Repair work
u Insurance
• Debtors control u Advertisements
u Discount granted
u telephone
Cash and cash equivalents u Water and
electricity
• Bank (Dr.)
Dr. Income Cr.
• Petty Cash
- +
• Cash float
u Sales
• Fixed deposit (less than 12
u Current Income
months) u Interest income
u Rent income
u Discount received




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, IMPORTANT TRADING CALCULATIONS:

100
1. Cost price Sale price x
100+%
100+%
2. Sales price [cost price + profit margin] Cost price x
100
Selling price - Cost price 100
3. Profit margin (margin) x =%
Cost price 1
100+%
4. Sales Cost of sales x
100
100
5. Cost of sales Sales x
100+%



EXAMPLE OF CALCULATIONS
[GENERAL ACCOUNTING EQUATION > GENERAL LEDGER]
[effect on the accounting equation]
1. Office equipment purchased.
>Equipment (A) 
>Bank (A)  [we bought the equipment in cash SO our bank is reducing]
ACCOUNT Dr. ACCOUNT Cr. ASSETS OWNER'S INTEREST LIABILITIES
Equipment Bank
[Increase [Assets REDUCE +
0 0
assets on the on the credit -
debit side] side]

2. Water bill paid.
>Water and electricity [Issue > OWNER'S INTEREST -] (E - ) DEBIT EXPENSES 
>Bank (A) [pay the bill with cash]
ACCOUNT Dr. ACCOUNT Cr. ASSETS OWNER'S INTEREST LIABILITIES
Water and Bank
- - 0
electricity


3. Rental income obtained [> OBTAINED].
>Rental income [Income > OWNER'S INTEREST +] (E + ) CREDIT INCOME 
>Bank (A)  [we MONEY GET IN > our bank INCREASES]
ACCOUNT Dr. ACCOUNT Cr. ASSETS OWNER'S INTEREST LIABILITIES
Bank Rent income


[Increase [Owner's
+ + 0
assets on the interest
debit side] INCREASED on
the credit side]



4. Stationery purchased.
>Writing needs = EXPENSE (E - ) 
>Bank (A) 
ACCOUNT Dr. ACCOUNT Cr. ASSETS OWNER'S INTEREST LIABILITIES
Stationery Bank - - 0


3© Noted Summaries [Grade 10 : Accounting] www.notedsummaries.co.za