SS1: FINANCIAL ACCOUNTING - 1ST TERM
Introduction to Booking Keeping and Accounting | Week 19 Topics|1 Quiz
Introduction to Booking Keeping and Accounting
Introduction to History of Accounting in Nigeria
Professional Bodies in Accounting
Benefits of Accounting to the Profession & Society
Regulatory Bodies that Checkmate Unethical Practices
Determine Debtors and Creditors
- Introduction to Booking Keeping and Accounting
Introduction to Books of Account | Week 25 Topics|1 Quiz
Subsidiary Books of Account I | Week 34 Topics|1 Quiz
Subsidiary Books of Account II | Week 44 Topics|1 Quiz
Principles of Double Entry Book Keeping | Week 51 Topic|1 Quiz
Cash Book | Week 66 Topics|1 Quiz
Petty Cash Book | Week 71 Topic|1 Quiz
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The accounting equation is the fundamental framework of the entire financial accounting process. The whole of accounting is based on this equation.
The equation can be expressed as:
Assets = Capital + Liabilities
Assets: Can be defined as the properties or resources of a business. Example Land and Building, Premises, Motor Van, Cash in hand, etc.
Liabilities: These are obligations to pay out money sometime in the future. It is the indebtedness of the firm to outsiders. Examples Loans, Creditors, Overdrafts, Debentures, etc.
Capital: This is the total money provided by the owner to start a business. It is equally referred to as the: “NET Worth or Owners Equity”.
Summary of Accounting Equation:
Assets = Liabilities + Capital
Capital = Assets – Liabilities
Liabilities = Assets – Capital
Worked Example on Accounting Equation:
You are required to complete the gaps in the following Table:
(a) Assets = Liabilities + Capital
300,000 = L + 190,000
L = 300,000 – 190,000
L = 110,000
(b) Assets = Liabilities + Capital
A = 18,000 + 14,000
A = 32,000
(c) Assets = Liabilities + Capital
5,000,000 = 2,000,000 + C
C = 3,000,000.