ACCOUNTING
, Accounting Entity concept DUALITY CONCEPT
( apply to all business) .
Accountants see total assets as
equal to total
-
Accountants see any business to have equities .
Total assets are equal to the claims on
its own life A to be separate from those assets by liabilities and owners
equity
its owners for recording and .
reporting purposes .
Every transaction has at least two effects on
accounting equation .
What is accounting entity ?
EFFECTS THE ACCOUNTING EQUATION
Definition : An accounting entity is
any organisational OF
and prepares sales of
unit that keeps records
accounting cash 1,000
.
A L t E NE
-
- No effect
reports
=
.
=
sale is revenue -14000
separate entity for
business is seen as a cash
-
Any
-
.
HE t 1000 BS :
CA t 11000
accounting purposes and it is separate from -11000
=
the
OE OC t Act R E D
accounting entity
= - -
owner The .
is always the
business .
.
Only those transactions related to the firm will Pay 11000 cash to creditor A =L toe
be recorded in the accounts liabilities -11,000
Bank creditor t O
.
=
assets -
nooo
→ apply
for company
OE -
1,000
-
IN =
-
1000 f 0
LEGAL ENTITY CONCEPT IS -
No
cash flow sheet
.
Accountants see business to have its own life and to be separate from its BS - YES :
CA -
11000 =
ka
CC 11000
operating activity outflow
-
Companys shareholders separate
owners for decision making in the eye of law .
apply to the company
ACCOUNT I NG EQUATION
what is a legal entity ?
*
cannot apply in
accounting Assets ( A ) Equities ( E )
=
for Assets liabilities
legal entity is the
party that makes decision and responsible the decision -1 Owner 's
Equity
'
-
-
and action taken by the business . A =
L t OE
A company is a legal entity
'
.
What is ASSETS ?
Non current -
Assets CURRENT ASSETS
nothing
to do TANGIBLE NCA inventories or stocks
recordin 's
with
INTANGIBLE NCA
debtors or account receivables
the owner 1 partner
INVESTMENT
Tension:: : pay
cash at bank
for debts
HOW TO DEFINE - -
- -
?
ASSETS Resources controlled:
by the entity as a
rgmoewseantairdeo.fr result of past events and from which future
economic benefits are expected to flow to the
UNLIMITED LIABILITY entity .
the legal entity needs to use personal assets to pay for future debts incurred
-
NON CURRENT
-
Assets which have been brought with a
business :
by the .
ASSETS view to continuo Sly earn revenue .
They
LIMITED INDUSTRY are expected to be used in the business for
limited more than twelve months
amount invested in the business
.
'
to
CURRENT Assets which are converted to
: easily can be
ASSETS cash within twelve months of the balance
sheet date .
, Accounting Entity concept DUALITY CONCEPT
( apply to all business) .
Accountants see total assets as
equal to total
-
Accountants see any business to have equities .
Total assets are equal to the claims on
its own life A to be separate from those assets by liabilities and owners
equity
its owners for recording and .
reporting purposes .
Every transaction has at least two effects on
accounting equation .
What is accounting entity ?
EFFECTS THE ACCOUNTING EQUATION
Definition : An accounting entity is
any organisational OF
and prepares sales of
unit that keeps records
accounting cash 1,000
.
A L t E NE
-
- No effect
reports
=
.
=
sale is revenue -14000
separate entity for
business is seen as a cash
-
Any
-
.
HE t 1000 BS :
CA t 11000
accounting purposes and it is separate from -11000
=
the
OE OC t Act R E D
accounting entity
= - -
owner The .
is always the
business .
.
Only those transactions related to the firm will Pay 11000 cash to creditor A =L toe
be recorded in the accounts liabilities -11,000
Bank creditor t O
.
=
assets -
nooo
→ apply
for company
OE -
1,000
-
IN =
-
1000 f 0
LEGAL ENTITY CONCEPT IS -
No
cash flow sheet
.
Accountants see business to have its own life and to be separate from its BS - YES :
CA -
11000 =
ka
CC 11000
operating activity outflow
-
Companys shareholders separate
owners for decision making in the eye of law .
apply to the company
ACCOUNT I NG EQUATION
what is a legal entity ?
*
cannot apply in
accounting Assets ( A ) Equities ( E )
=
for Assets liabilities
legal entity is the
party that makes decision and responsible the decision -1 Owner 's
Equity
'
-
-
and action taken by the business . A =
L t OE
A company is a legal entity
'
.
What is ASSETS ?
Non current -
Assets CURRENT ASSETS
nothing
to do TANGIBLE NCA inventories or stocks
recordin 's
with
INTANGIBLE NCA
debtors or account receivables
the owner 1 partner
INVESTMENT
Tension:: : pay
cash at bank
for debts
HOW TO DEFINE - -
- -
?
ASSETS Resources controlled:
by the entity as a
rgmoewseantairdeo.fr result of past events and from which future
economic benefits are expected to flow to the
UNLIMITED LIABILITY entity .
the legal entity needs to use personal assets to pay for future debts incurred
-
NON CURRENT
-
Assets which have been brought with a
business :
by the .
ASSETS view to continuo Sly earn revenue .
They
LIMITED INDUSTRY are expected to be used in the business for
limited more than twelve months
amount invested in the business
.
'
to
CURRENT Assets which are converted to
: easily can be
ASSETS cash within twelve months of the balance
sheet date .
