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2025 Acc 152 Topic 1 (Updated)

The document introduces key accounting concepts, focusing on the double-entry accounting system and its principles. It outlines the users of financial statements, including internal and external stakeholders, and explains the accounting equation. Additionally, it provides examples of transactions and their impact on assets, equity, and liabilities.

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lukanieuwenhoudt
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12 views

2025 Acc 152 Topic 1 (Updated)

The document introduces key accounting concepts, focusing on the double-entry accounting system and its principles. It outlines the users of financial statements, including internal and external stakeholders, and explains the accounting equation. Additionally, it provides examples of transactions and their impact on assets, equity, and liabilities.

Uploaded by

lukanieuwenhoudt
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 68

Topic 1: Introduction to key

accounting concepts and the


double-entry accounting system
1. Accounting concepts and terms
2. Double entry principle
3. Users and uses of Financial statements
4. Accounting cycle - Flow of transactions
5. Accounting Equation
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USERS AND USES OF ACCOUNTING
INFORMATION
External to the business

Investors

Unions

Governments
Potential
Analysts Employees
Creditors/lenders
INTERNAL USERS

Management
strategic decision
making

Employees:
Benefits - retirement
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Account name:
Left side Right hand side
DR CR
Basic DEBIT ACCOUNTS: Basic Credit ACCOUNTS:
+ ASSET + Capital/Equity
Bank
Vehicles Liabilities:
+Drawings/ Dividends + Mortgage loan
Creditors
+ EXPENSES:
Water and electricity + Income
Interest on fixed deposit
Sales
• Assets
• Definition: Assets are resources controlled by the
business as a result of past events, from which future
economic benefits are expected to flow to the business.
• An item is classified as an asset if it meets all the criteria of the
definition.
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REMEMBER:
Capital; Drawings; income and expenses affect OE
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1. John contributes R10 000 cash to his business.
1. Bank > the business received this money into its account
2. Capital > as the owner he invests in his business

Asset = OE + Liabilities
1 DR BANK CR Capital
+R 10 000 R10 000
1. John renders services for R 6000.
Services rendered/Current income > for work done
Bank > received cash from client

Asset = OE + Liabilities
1 DR BANK CR Services Rendered
+R 6 000 R 6 000
1. Jack pays R4 500 cash for a computer.
1. Computer> Equipment > asset increases
2. Bank > paid cash > asset decreases

Asset = OE + Liabilities

1 CR BANK - R 4 500 0 0

DR EQUIPMENT + R4 500
Ignore mentions of VAT as this is not
required for your course

Asset = OE + Liabilities
1 DR BANK CR Services Rendered
+R 11 500 + R11 500
Ignore mentions of VAT as this is not
required for your course

Asset = OE + Liabilities
1 DR BANK CR Sales
+R 45 472 + R45 472
Assets

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EQUITY

+
Liabilities
Financial period
Financial analysis > converting data into useful information

Accounting Equation
p.g.15

Assets = Owners’ Equity + Liabilities


Pg. 16

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