Class notes
Double entry booking
- Course
- Institution
double entry booking system
[Show more]
Seller
Follow
harveygurner2
Content preview
MN10669 lec 2Double-entry booking system
The accounting entity concept – an artificial construct that defines the boundaries of the
organisational unit which is the object of focus of the particular accounting process and
determines those transactions to be recorded. It can be a legal entity such as a company,
club, uni, etc. However, it may be part of a legal entity or entities such as a sole trader or
partnership respectively. That is the part of a persons or people's activities which relate to
their business
Accounting equation and the statement of financial position = assets – liabilities = capital
the nature of assets, liabilities and capital
an asset is a tangible or intangible resource that is owned or controlled by an accounting
entity, and which is expected to generate future economic benefits (e.g. plant and
machinery, office equipment, inventories, trade receivables, cash) what the business owns
a liability is a legal obligation to transfer assets or provide services to another entity which
arises from some past transaction or event (e.g., loans, trade payables) what the business
owes
capital is the difference between an entity’s assets and liabilities = net worth of business
X – just saving time to reduce need to change the year but is equal to a number i.e. 2 making
it 2021
£10,000 is an asset and no liability therefore £10,000-0 = capital
Statement of financial position form ^
, On jan 2 he bought goods for resale costing £3,000 on credit
Assets = cash - £10,000
Inventory - £3,000
Liabilities = trade payables - £3,000
Capital = £10,000
SOFP
On jan 3 he sold the goods on credit for £4000
Assets = cash - £10,000
Trade receivables - £4000
Liabilities = trade payables - £3000
Capital = £11,000
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller harveygurner2. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.15. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67474 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now