Equations
_____ + Expenses = Equity + Liabilities + Income
Assets
Bank overdraft is a
Liability
Bank is a
Asset
What is the definition of the Understandably Concept
The sheet/statement is easy to read and understand
A balance sheet and Income statement are the same thing
False
Income = ____ = Profit
Expenses
Insurance is an
Expense
Insurance is an
Expense
What principle is this?
Cost is whatever you bought it for. NEVER CHANGE
Historical cost
Liabilities make Equity go up
False
What type of Depreciation is this?
Cost - Accumulated Depreciation) x Rate of Depreciation = Depreciation for the year.
Diminished Value
Deprecation on vehicles is a
-Assets
Bank overdraft is a
Liability
Duality Concept means?
Every transaction has a debit and a credit. Debit=Credit
True
Cost x rate of Dep =
Dep for that year
Rent Received is an
Income
Deprecation is a
-Asset
Name for this concept?
Note down the transactions the day the goods swap hands.
Realisation Concept
Petrol is a liability
False
Receipts - Payments = _____
Surplus/Deficit
Deposit on Electricity is an
Asset
Drawings is a
-Equity
Once you start calculating something through a method we must do it like that forever. This is the
Consistency concept
Reporting Period is a given period of time, after reaching the end, a business will produce a set of financial information about its organisation.
True