COMMERCE 1BA3 Lecture Notes - Lecture 3: Going Concern, Deferral, Gross Profit
28 Sep 2013
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Accounting transaction see whether it affect assets, liabilities or shareholders equity; choose whether to deal with transaction. Business transactions that affect the accounting equation are also accounting transactions. The accounting equation must be balanced after analyzing each transaction. Cash assets decrease ,000: assets = liabilities + shareholders equity a l = s. Eg/ provides services for ,000; customers paid and the remaining balance is due in 30 days. Service revenue re; shareholders equity increase . Accounts receivable (a/r) assets increase . Debit and credit rules: debits reflect. Decreases in liabilities and shareholders equity: credits reflect. Recording revenues and gains eventually affects se, which is on the right side of equation. Ni = net income: assets = liabilities + se. Assets = liabilities + (capital + beg re + ni dividends) Assets = liabilities + (capital + beg re + rev exp div)
