（精）财务会计 assets, liabilities and equity.ppt

The Accounting Equation Assets What is an asset? It is something a company owns or controls which has future economic value. land building equipment goodwill Liability What is a liability? It is something a company owes. money service – legal retainers product – magazines Owners’ Equity What is owners’ equity? It is what’s left of the assets after liabilities have been deducted. the same as net assets the owner’s claim on the entity’s assets Transactions that AffectOwners’ Equity Revenues What are revenues? They are amounts received or to be received from customers for sales of products or services. sales performance of services rent received interest received Expenses What are expenses? They are amounts that have been paid or will be paid later for costs that have been incurred to earn revenue. salaries and wages electricity and gas supplies used advertising Accounting for Business Transactions What is a transaction? It is any event that both affects the financial position of the business and can be reliably recorded. Accounting for Business Transactions The equation always stays in balance. Each transaction affects at least two accounts, sometimes more. Some transactions affect only one side of the equation; some affect both sides. Double-Entry Accounting Double entry bookkeeping means to record the dual effects of each business transaction. Assets = Liabilities + Owners’ Equity Assets are on the left (debit) side. Liabilities and Equity are on the right (credit) side. The T-Account (Ledger Account) The T-Account The Rules of Debit and Credit The Double-Entry System Journals What is a journal? It is a list in chronological order of all the transactions for a business. Identify transaction from source documents. Specify accounts affected. Apply debit / credit rules. Record transaction (with description). Journals What does a journal entry include? date of the transaction title of the account debited title of the account credited amount of the debit and credit (