Basic Points Of Accounting [ Part 1 ]

The following are the list of Accounting  basic points [ part 1 ]

1. Basic Equation

• Asset = Liabilities + Equity

1. 2.  Account T = Left side is Debt account, right side is credit account

1. 3.Analyze and record the transactions:

•  Read carefully details of transactions to determine what that is assets, liabilities, equity owners, incomes, expenses, or owners withdraw that be affected by that transactions.
• To each accounts is affected by that transactions, determine what that account an increases or decreases.
• Determine what every increasing or decreasing is recorded as debt account or as credit account.
• Record the transactions use a journal entry.
• Post the journal entry periodically to the related account in the ledger.
• Arrange the  list of balances are unadjusted at the last period.

1. 4. Financial Statement

• Income statement

The resume of entity's incomes and expenses at the certain period , e.g. monthly or yearly 

• Statement of the owner's equity 

The resume of  owner's equity change an entity during certain period, e.g. monthly or yearly

• Balance

The list that consists  of entity's assets, liabilities, and owner's equity at the certain date, usually at the last day closing in the a month or a year

• Cash Flow statement

The resume of cash receipts and cash payments of an entity during a certain period, e.g. monthly or yearly.

1. 5. Accounting cycle

• Continued in the next edition (@_^)