Accounting Concept Map

Owner'sACCOUNTINGProcess of analysing, recording, summarising, reporting, interpreting finance infomation of businessMakes decisions & Take RisksSole ProrietorshipPartnershipCompany (Limited)ShareholdersTypes Of BusinessServiceTrading ProductsManufacturingConsultingBuy low and Sells highest = LIABILITIES + SHAREHOLDERS'EQUITY Organisation BusinessExternalInternal InvestorsCreditorsTax AuthoritiesManagersOwnersEmployeesREVENUERecording of AccountingHistorical CostActual paid Amount To maintain operation of the Company From source documentsMonetaryQuantifying in $$ Entity1.Owner 2.BusinessTransactionsAt least 2 accounts 1. Debit2.Credit Double Entry System 1.Separate2. RecordedACCOUNTING CYCLE Increase in CreditDecrease in DebitCashOrdinary Capital ShareInventoryBuy for ResaleStep 1 :Step 2:RulesLeft Column Right ColumnAnalysis of Business transactionRecording transaction in General JournalStep 3:Posting journal entries to the General LedgerStep 4:Step 5:Step 6:Step 7:Preparing in pre-trial closing balancePreparing financial statement Closing temporary account Preparing the pre-closing trial balanceClosing at the end of accounting period 5 Steps Accounts AffectCategoryDecrease / Increase of AccountRules of Dr & CrAmount AccountsIncrease / Decrease in each item of equationGeneral LedgerChart of accountsClaim on net assest of businessASSETSEXPENSES+ DEBIT- CREDIT Office EquipmentFurnitureCashProperties of value owned by BusinessDebit OwnedBank LoanAccount Payable On CreditEnding balance of all accounts = General Ledger Total debit = Total CreditShare decision making and take risksASSETS = LIABILITIES + OWNER'S EQUITY
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