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Essential Accounting Concepts Explained

The document covers fundamental concepts of accounting, including the distinction between accounting and bookkeeping, the accounting equation, and the effects of transactions on assets, liabilities, and capital. It explains the double entry system, the terminology of debit and credit, and the importance of maintaining separate records for each transaction. Additionally, it discusses trial balances and the accounting for goods and inventories.

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Hadi Abdul
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0% found this document useful (0 votes)
4 views70 pages

Essential Accounting Concepts Explained

The document covers fundamental concepts of accounting, including the distinction between accounting and bookkeeping, the accounting equation, and the effects of transactions on assets, liabilities, and capital. It explains the double entry system, the terminology of debit and credit, and the importance of maintaining separate records for each transaction. Additionally, it discusses trial balances and the accounting for goods and inventories.

Uploaded by

Hadi Abdul
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Basic Accounting

Accounting vs. Bookkeeping


Accounting Equation
Accounting Equation- Calculations
Assets, Liabilities, and Capital
Assets, Liabilities, and Capital
Effects of transactions on assets, liabilities and capital

- Cash+
Effects of transactions on assets, liabilities and capital
Effects of transactions on assets, liabilities and capital
Effects of transactions on assets, liabilities and capital
Double Entry for assets, liabilities, and capital
Double Entry System: The system refers to recording of each transaction at two destinations
simultaneously to develop each item’s record separately given in a single transaction.
This practice will help in developing separate record for each item to find out how much of
particular asset, liability, capital, expense, income etc are at any particular time during the month
or the year.
Account/Ledger/T-account: These are different names of the same thing which is a separate
record of each item in the transaction.
Language of accounting is debit and credit which are abbreviated as “DR – Debit record”, and
“CR – Credit record”.
The meaning of debit and credit changes with respect to assets, liabilities, & Capital, or
expenses or income.
E.g. Increase in asset = Debit
Decrease in asset = Credit
Increase in liabilities and capital = Credit
Decrease in liabilities and capital = Debit
We have already practiced increase, and decrease, keeping the same in mind, let’s do the
following:
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Trial Balance
Trial Balance
Trial Balance
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Double Entry for assets, liabilities, and capital
Trial Balance
Trial Balance
Accounting for Goods/Inventory
Accounting for Goods/Inventory
Accounting for Goods/Inventory
Accounting for Inventories
Accounting for Inventories
Accounting for Inventories
Accounting for Inventories
Accounting for Inventories
Accounting for Inventories
Double Entry for assets, liabilities, and capital
Trial Balance
Accounting for Goods/Inventory
Accounting for Inventories
Accounting for Inventories
Accounting for Inventories
Accounting for Inventories
Accounting for Inventories
Accounting for Inventories
Accounting for Inventories
Trial Balance
Income and Expenses
Income

Expenses
Income and Expenses
Books of Prime Entry
General Journal
Types of Ledgers/Sub-division of Ledger
Books of Prime Entry
Books of Original Entry
Books of Original Entry
Books of Original Entry
Books of Original Entry
Books of Prime Entry
Books of Original Entry
Books of Original Entry
Books of Original Entry
Books of Original Entry
Books of Original Entry
Books of Prime Entry

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