Financial position of a business
Assets
Bank, Accounts Receviable and Supplies
Assets= Liabilites + Owner's Equity
Liabitlies
Accounts Payable, Bank loan
Capital
Owners Equity
T-Accounts
Cr/Dr theory: Dr=Cr
Debit on the left
Calculations of the sum total of each account
Credit on the right
Account Balnces
Sole Proprietorship
Type of enterpise run by one person
Landscapers
Partnership
Unincorporated business run by more than one person
GoPro
Redbull
Corporation
A business which is an individual in the eyes of law
Walmart
Detailed rules and standards in preparing financial statements
Business Entity Concept
Accounting for a business must be sperate from the owner's personal affairs
Cost Princible
Must record original values not predicted market price
Continuing Concern Concept
Assets values cannot be assessed until sold
Principle of conservation
Accounting for a business must be fair and reasonable
What accounts are affected in a transaction
Are the accounts increasing or decreasing
Equation analysis sheet
Accounting equation balance after every transaction