Features
Features:

Product Tour >

Edraw AI >

Paid Plans:

Individuals >

Business >

Eduaction >
Resources
Blog

History

How-tos & Tips

Discovery

Biography

Business Analysis

Examples

AI concept Map

Free AI Mind Map Generator

Onenote Mind Map

Bcg Matrix Examples

Nike Marketing Strategy

Unilever SWOT Analysis

Make Mind Maps in Google Docs

Guide

FAQs

What's New

Resource Center
Templates
All Templates

Brain Storming Templates

Strategy and Planning Templates

Project Management Templates

Product Management Templates

Human Resources Templates

Agile Workflow Templates

Marketing Templates

Education Templates

Fun and Games Templates

User Gallery
Download
Pricing
Enterprise

accounting basis

Chapter 2 of Elementary Accounting Practice summarizes accounting elements and their recognition and measurement, Accounting items and debit and credit accounting methods, etc. Hope it helps everyone.

Edited at 2024-01-29 18:25:20

PlotWizard

Recent works View more works>>

accounting basis

PlotWizard

Recent works View more works>>

Recommended to you
Outline

Overview of Chapter 1 of Elementary Accounting Practice
- 33
PlotWizard
accounting basics
- 41
- 2
PlotWizard
Under accounting basics
- 24
PlotWizard

accounting basis

Accounting elements and their recognition and measurement

assets

past transactions or events

are resources owned or controlled by the enterprise

It is expected to bring economic benefits to the enterprise

Liabilities

is formed by past transactions or events

It is the current business undertaken by the enterprise (not potential business)

It is expected that economic benefits will flow out of the enterprise

Owners' equity

Definition: It refers to the residual interest enjoyed by the owner after deducting liabilities from the assets of the enterprise.

The recognition and measurement of owners' equity mainly relies on the recognition and measurement of assets and liabilities. The amount of owners' equity is equal to the net amount of the company's total assets minus creditors' equity, which is the net assets of the company, reflecting the owner's (shareholder's) interest in the company. economic interest in assets

Classification of owners’ equity

capital invested by owners

Subjects: paid-in capital (equity), other equity instruments, capital reserve - capital (equity) premium

special transactions or events

Subject: Capital Reserve - Other Capital Reserve

Gains or losses recognized directly in owner's equity

Subject: other comprehensive income

retained earnings

Subjects: Surplus reserves, profit distribution - undistributed profits

income

formed in daily activities

Will result in an increase in owner's equity

It is the total inflow of economic benefits independent of the capital invested by the owner.

cost

occur in daily activities

resulting in a reduction in owner's equity

Is the total outflow of economic benefits that is not related to the distribution of profits to owners

profit

Definition: refers to the operating results of an enterprise during a certain accounting period

Profit reflects revenue minus expenses, and the net amount of gains directly included in the current period's profits minus losses directly included in the current profits and losses.

Profit = (Income - Expenses) (Profit directly included in the profit of the current period - Loss directly included in the profit and loss of the current period)

Accounting accounts and debit and credit accounting methods

Accounts and Accounts

Accounting subjects are items that classify and account for the specific contents of accounting elements. They are the basic unit for accounting and providing accounting information.

Accounting accounts are set up according to accounting subjects, have a certain format and structure, and are used to classify and account for the increase, decrease, and changes in accounting elements and their results.

Debit and credit accounting method

The account structure of the debit and credit accounting method: the left side of the account is called the debit side and the right side is called the credit side.

Expenses and assets increase on the debit side and decrease on the credit side; liabilities, owners' equity, and income increase on the credit side and decrease on the debit side.

The debit balance at the end of the period for assets and costs = the debit balance at the beginning of the period, the amount of debits for this period - the amount of credits for this period

Liabilities and owners' equity Ending credit balance = Beginning credit balance Current period credit amount - Current period debit amount

The net income of the current period in the income category of profit and loss is transferred to the current year's profit account at the end of the period to calculate the current profit and loss. There is no balance after the transfer.

The net amount of expenses in the profit and loss category for the current period will be transferred to the current year's profit account at the end of the period to calculate the current profit and loss. There will be no balance after the transfer.

How to calculate the ending balance: Starting from the opening balance, add in the same direction and subtract in the opposite direction.

The accounting rules of the debit and credit accounting method: if there is a debit, there must be a credit, and the debit and credit must be equal.

Accounting entries: A record that lists the names of accounts that should be debited and credited and their amounts for each brokerage business. Accounting entries are recorded in accounting vouchers

Elements: direction of borrowing and crediting, corresponding accounts and their amounts

Classification

According to the number of accounts involved, accounting entries are divided into simple accounting entries and compound accounting entries.

Simple accounting entries: accounting entries that only involve the debit of one account and the credit of another account, that is, an accounting entry of one debit and one credit

Compound accounting entries: refer to accounting entries composed of two or more (excluding two) corresponding accounts, that is, one debit and multiple loans, multiple borrows and one loan, or multiple borrows and multiple credits.

Simple entries that are not related to each other cannot be combined and added up to account for multiple borrowings and multiple credits.

The 3 3 1 rule for writing accounting entries

Three basics

accrual basis

chart of accounts

Account structure under the debit and credit accounting method

three steps

Look at increases and decreases (the occurrence of brokerage business or events causes corresponding increases and decreases in accounting factors)

Find accounts (accounting accounts corresponding to accounting elements)

Fixed direction (the direction of borrowing and lending corresponding to changes in increases and decreases)

a metaphor

"Carry over" means "move in"

Trial balance under debit and credit accounting method

trial balance

The total debit amount of all accounts in the current period = the total credit amount of all accounts in the current period

Basis: The accounting rules of the debit and credit accounting method (if there is a debit, there must be a credit, and the debit and credit must be equal)

balance trial balance

The total debit balance of all accounts at the end of the period (beginning) = the total credit balance of all accounts at the end of the period (beginning)

Basis: Identity relationship between assets and equity (Assets = Liabilities Owner’s Equity)

An unbalanced trial calculation means that there must be an error in the accounting, but an unbalanced trial calculation does not mean that the accounting must be correct.