Equations
_____ + Expenses = Equity + Liabilities + Income
What is Assets
Bank is a
What is an Asset?
What is the Economic entity principle?
What is: the separation of business and owner
Asset
What is:
Bought in past
Control in present
Economic inflow in future
Calculate the depreciation:
Straight line:
Cost $10,000
Rate 10%
What is $ 1,000
Cost x rate of Depreciation =
What is Straight line Depreciation
Insurance is an
What is an expense?
What is the money measurement principles
what is:
record only monetary transactions and in the same currency
Liability
What is:
Acquired in past
Obligation in present
Economic outflow in future
Explain residual value
What is:
The value that will be the minimum value to can get for an asset you own once it is written down
Income - ____ = Profit
What is Expenses?
Deprecation is a
What is an expense?
What is a financial period?
What is: a length of time after which financial statements must be made
Equity
Assets - Liabilities
Calculate depreciation using diminished value method:
Cost: $ 10,000
Accumulated depreciation: $ 2,000
Rate 5%pa
What is $ 400
What is the formula for straight line depreciation?
What is Cost x rate = depreciation?
Rent Received is an
What is an income?
What is the prudence principle?
What is:
Value assets at lowest cost and liabilities at highest cost and therefore equity at lowest value.
Income
What is:
Increase in assets, increase in equity and NOT given by owner
Calculate depreciation of a photocopier using useful life:
Cost: $10,000
Useful life: 100,000 copies
Used life: 20,000
What is $ 2,000
What type of Depreciation is this?
Cost - Accumulated Depreciation) x Rate of Depreciation = Depreciation for the year.
What is Diminished value?
Deposit on Electricity is an
What is an asset?
What is the Accrual principle?
What is:
Transactions must match the money trail. All and any money related to transactions within that year is taken into account
Expense
What is:
Decrease asset, decrease equity and NOT taken by owner
Calculate depreciation of a photocopier using useful life:
Cost: $10,000, Residual value: $ 1,000
Useful life: 100,000 copies
Used life: 20,000
What is $ 1,800