Introduction to Accounting
Professional ethnics of accountants
Integrity and objectivity
Payment is made at the same time or immediately
Cash sales/ purchase
Total cost price of goods that have been sold
Cost of sales
Lin deposited $1000 cash into the business bank account
Dr Cash at Bank
Cr Capital
Ensure arithmetic accuracy in recording
trial balance
Activities of business separate from the actions of the owner
Accounting entity
Daily record of transactions
Journal
Cash discount received from credit suppliers for making early payment
Discount received
Business obtained a loan of $2000 from bank.
Dr Cash at bank
Cr Bank loan
Net sales revenue
Indefinite economic life
Going concern
Consolidation of all transactions of a specific account
Ledger
Money earned from providing services
Service fee revenue
Business bought $600 dresses by cheque for resale.
Dr Inventory
Cr Cash at bank
Net sales revenue-cost of sales
Gross profit/loss
Only monetary transactions are recorded
Monetary Theory
Reduces the amount owed by credit customers
Credit note
Money borrowed when the bank account is overdrawn and goes below zero
Bank overdraft
Business sold $1500 of dresses on credit to Kim Dresses. The cost of dresses was $500.
Dr Trade Receivables- Kim dresses
Cr Sales Revenue
Dr Costs of sales
Cr Inventory
How resources are obtained and used in a business
Statement of Financial Position
Accounting information supported by reliable and verifiable evidence
Objectivity
A report on assets, liabilities and equity at a specified date
Statement of financial position
Capital + Income- Expenses- Drawings
Owner's equity
Kim Dresses returned $300 worth of dresses of wrong colour. The cost of the dresses was $130.
Dr Sales Returns
Cr Trade Receivables -kim dresses
Dr Inventory
Cr Cost of sales
Assets- Liabilities
Net assets