MAA103 Lecture Notes - Lecture 5: Accrual, Bank Statement, Accounts Payable

• School: Deakin University
• Department: Business and Law
• Course: MAA103
• Professor: Peter Vuong

Document Summary

Inventory: supplies, accounts receivable, gst paid, prepayments. Liabilities: debts and obligations of the entity, owed to an external party, will result in a future economic sacrifice. Examples: bank overdraft, accounts payable, accrued expenses, gst collected. Owners" equity: residual interest in the assets of the entity, after deducting all its liabilities, represents the owner"s claim on the (net) assets of the entity. Expenses: an overall net decrease in assets or net increase in liabilities as a result of business activity, costs incurred in running the business in order to earn income, value of goods consumed, value of services used up . The process of incorporating items in the statement of the financial position, whilst meeting criteria of: Probability (benefit will be received or a sacrifice will be made) A transaction is an event that has a financial impact on an entity. Business transactions that recorded are initially recorded in some form of source document i. e. receipts, bank statement.