ACCT1000 Lecture Notes - Lecture 6: Australian Taxation Office, General Ledger, Trial Balance
31 May 2018
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ACCT – Module 6
Accounting cycle 1: Recording business transactions and accounting
for service entities – Part B
Where to record information – Ledger accounts
All components of an organisations financial activity is recorded within specific ledger
accounts.
Each account records one thing only:
- Cash: the amount of cash available to the business
- Accounts receivable: amount owed by the customers
- Inventory: value of inventory held by the business
- Accounts payable: amount owed to suppliers
- Loan payable: amount owed to lenders
- Capital: assets contributed to the business by the owner
- Retained profits: owners share of profits
Financial accounting elements
Each ledger account can be classified into one of five elements. The elements, and the
statement in which they appear, is shown below:
1. Assets Balance
2. Liabilities Sheet
3. Owners Equity
4. Revenues Income
5. Expenses Statement
Accounts: Balance Sheet
Asset Accounts
- Cash at bank
- Accounts receivable
- Other receivables and debtors
- Prepaid expenses
- Land
- Buildings
- Plant and equipment
Liability Accounts
- Accounts payable
- Unearned income
- Other current liabilities
- GST collection
- Mortgage payable
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Document Summary
Accounting cycle 1: recording business transactions and accounting for service entities part b. All components of an organisations financial activity is recorded within specific ledger (cid:858)accounts(cid:859). Inventory: value of inventory held by the business. Cash: the amount of cash available to the business. Accounts receivable: amount owed by the customers. Capital: assets contributed to the business by the owner. Each ledger account can be classified into one of five elements. The elements, and the statement in which they appear, is shown below: assets, liabilities, owners equity, revenues, expenses. Investment of assets by the owner: withdrawal of assets by the owner. Two account types: capital, drawings or withdrawals. Income that arises in the course of ordinary activities of an entity: usually through the provision of services or sale of goods. Incomes that do no usually arise in the course of ordinary activities of an entity: usually of a non-recurring nature.
