Class notes
FinACC 188 notes
- Course
- FinACC 188 (FINACC188)
- Institution
- Stellenbosch University (SUN)
Lecture notes FinACC 188. Chapter 1 - 6
[Show more]
Seller
Follow
Content preview
FINANCIAL ACCOUNTING 188CHAPTER 1, 2 & 3 :
ENTITY CONCEPS ; BUSINESS & OWNERS SEPARATE I.T.O ACCOUNTING RECORDS
FINANCIAL POSITION = EQUITY ( WHAT THE OWNER CONTRIBUTED + PROFIT OR
LOSS )
DEBIT = CREDIT + CREDIT
ASSETS = EQUITY + LIABILITY
EQUITY = ASSETS – LIABILITY
FINANCIAL PERIOD = 1 YEAR / 12 MONTHS
( 1ST 11 CHAPTERS = SOLE PROPRIOTER )
ASSETS & EQUITY
. DOES IT MEET THE RECONITION & DEFINITION CRIERIA ?
. NET ASSET POSITION = STATEMENT OF FINANCIAL POSITION
• * Study Chapter 2.2.4 – 2.2.6 in the prescribed book
OWNERS EQUITY = CAPITAL
ELEMENTS OF FINANCIAL STATEMENTS :
. ASSET
. LIABILITY
. EQUITY
. INCOME
. EXPENCE
[ TANGIBLE ASSET : ASSET YOU CAN SEE ]
[ INTANGIBLE ASSET : ASSETS YOU CAN’T SEE ]
Extended equation :
, Basic equation A=L+C (C=capital=equity=E)
EQUITY = Contributions (Ci) – Drawings (D) + Revenue (I) + Gains (Po) –
Current expenses (E) – Losses (Lo)
Therefore: A = L +(Ci – D + I + Po – E – Lo)
Therefore: A + D + E + Lo = L + Ci + I + Po
INCREASE DEBIT INCREASE
CREDIT
DECREASE CREDIT
DECREASE DEBIT
Recognition of assets :
◦ Asset recognition is appropriate if it results in RELEVANT AND
FAITHFULLY REPRESENTED information.
Recognition of liabilities :
◦ Liabilities recognition is appropriate if it results in RELEVANT AND
FAITHFULLY REPRESENTED information.
Recognition of income/gains and expenses/losses :
The financial statements / recognition of incomes and expenses are
linked because the recognition of one item (or a change in its carrying
amount) requires the recognition or derecognition of one or more other
items (or changes in the carrying amount of one or more other items).
For example:
(a) the recognition of INCOME occurs at the same time as:
(i) the initial recognition of an asset, or an increase in the carrying
amount of an asset; or
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 EFT, 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 this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller mulderisabella05. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R100,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
64438 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now