1. Chapter 1:Overview
1.1. Definition
1.1.1. the systematic and comprehensive recording of financial transactions pertaining to a business
1.1.2. recording , analyzing and summarizing
1.2. Types
1.2.1. Financial accounting
1.2.1.1. Provides external users with financial statements
1.2.2. Managerial accounting
1.2.2.1. Provides information needs for internal decision makers
1.2.2.1.1. Budget Officers
1.3. Users
1.3.1. External Users
1.3.1.1. Example of internal users
1.3.1.1.1. Managers
1.3.1.1.2. Officers/Directors
1.3.1.1.3. Internal Auditors
1.3.1.1.4. Sales Staff
1.3.1.1.5. Budget Officers
1.3.1.1.6. Controllers
1.3.2. Internal Users
1.3.2.1. Example of extenal users
1.3.2.1.1. Lenders
1.3.2.1.2. Shareholders
1.3.2.1.3. Customers
1.3.2.1.4. Consumer Groups
1.3.2.1.5. Governmetns
1.3.2.1.6. External Auditors
1.4. Accounting assumptions and principles
1.4.1. Accounting assumptions
1.4.1.1. Going concern concept
1.4.1.2. Accrual basis
1.4.2. Accounting Principles
1.4.2.1. Materiality and aggregation
1.4.2.2. Consistecy of presentation
1.4.2.3. Historical cost
1.5. Qualitative characteristic of financial information
1.5.1. Fundamental qualitative
1.5.2. Enhancing qualitative
2. Chapter 2: The accounting of Equation
2.1. Definition
2.1.1. Foundation of double-entry accounting system
2.2. The use of Accounting Equation
2.2.1. The accounting equation must remain in balance after each transaction
2.2.2. Examples
2.2.2.1. Investment by owner
2.2.2.2. Purchase of Equipment
2.2.2.3. Purchase of supplies
2.2.2.4. Services performed
2.2.2.5. Purchase of advertising
2.2.2.6. Payment of expenses
2.2.2.7. Receipt of cash
2.2.2.8. Withdrawal of cash by owner
2.3. The basic elements
2.3.1. Assets
2.3.2. Liabilities
2.3.3. Equity
2.3.4. Assets = Liabilities + Equity
3. Chapter 3: The accounting documentation in bussiness
3.1. Types
3.1.1. Sale system
3.1.1.1. Customer order
3.1.1.2. Dispatch goods
3.1.1.3. Raise Invoice
3.1.1.4. Receive payment
3.1.2. Purchase system
3.1.2.1. Purchase order
3.1.2.2. Reveive goods
3.1.2.3. Receive Invoice
3.1.2.4. Payment
3.1.3. Bank transaction
3.1.3.1. Receipt
3.1.3.2. Remittance advice
3.2. Sources of documents
3.2.1. Definition
3.2.1.1. the documents which are produced by or input into a bussiness's accounting system as a point to recording transaction
3.2.2. Purpose
3.2.2.1. Recording financial transactions
3.3. Book of prime entry
3.3.1. Purpose
3.3.1.1. Records of source documents
3.3.1.2. First record transactions
3.3.1.3. Serve to capture the transactions as soon as possible so the business may not lost or forgotten about
3.3.2. Types
3.3.2.1. Sales day book
3.3.2.2. Purchases day book
3.3.2.3. Cash book
3.3.2.4. Petty cash book
3.3.2.5. The payroll
3.3.2.6. The journal
3.3.2.7. Computerised books of prime entry
4. Chapter 4: Use of ledger entry
4.1. The ledger account
4.1.1. Assets accounts
4.1.1.1. A resource controlled by an entity as an result of past events and from which future economic benefits are expected to flow to the entity
4.1.1.2. Examples
4.1.1.2.1. Inventories
4.1.1.2.2. Machinery
4.1.1.2.3. Trading securities
4.1.1.2.4. Receivable
4.1.1.2.5. Cash in bank
4.1.1.2.6. Cach on hand
4.1.1.2.7. Factory buildings,...
4.1.2. Liabilities accounts
4.1.2.1. A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of resources embodying economic benefits
4.1.2.2. Examples
4.1.2.2.1. Payable
4.1.2.2.2. Loan
4.1.3. Equity accounts
4.1.3.1. The residual interest in the assets of an entity after reducing its liabilities
4.1.3.2. Examples
4.1.3.2.1. Capital
4.1.3.2.2. Net profit
4.1.4. Revenue accounts
4.1.4.1. Arises in the course of the ordinary activities of an entity
4.1.4.2. Examples
4.1.4.2.1. Sales
4.1.4.2.2. Fees
4.1.4.2.3. Interest
4.1.4.2.4. Dividends
4.1.4.2.5. Royalties
4.1.4.2.6. Rent
4.1.5. Expense acconts
4.1.5.1. Decreases in economic benefits during the accounting period in the form of outflows of assets or incurrences of liabilities that result in decreases in equity.
4.1.5.2. Examples
4.1.5.2.1. Salaries
4.1.5.2.2. Rent paid
4.1.5.2.3. Bank interest paid
4.1.5.2.4. Insurance expenses
4.1.5.2.5. Advertising expenses
4.2. Statements
4.2.1. SOFP (Statement of financial position)
4.2.2. SOPL (Statement of profit or loss)
4.3. T account
4.3.1. The two sides to a ledger account, and an account heading on top
4.3.2. 1-On the top of the account is its name
4.3.3. 2-There is a left-hand side, or debit side
4.3.4. 3-There is a right-hand side, or credit side
4.4. Recording transaction
4.4.1. Purchasing transactions
4.4.2. Sale transactions
4.4.3. Journal entries
5. Chapter 5: Trial Balance
5.1. Correction of errors
5.1.1. Types
5.1.1.1. Errors of transposition
5.1.1.2. Errors of omission
5.1.1.3. Errors of principle
5.1.1.4. Errors of commission
5.1.1.5. Errors of original entry
5.1.1.6. Compensating errors
5.1.2. Suspense account
5.2. Control account and reconciliation
5.2.1. Control accounts
5.2.1.1. Keep a total record of a number of individual items. It is an impersonal account which is part of the double entry system.
5.2.2. Reconciliation
5.2.2.1. A bank reconciliation is a comparison of a bank statement with the cash book.
5.3. Preparing trial balance
5.3.1. Purpose
5.3.1.1. List of ledger balances shown in debit and credit columns
5.3.1.2. Use to test the accuracy of the double entry accounting record
5.3.1.3. List the balances on ledger account
5.3.1.4. Total debits = total credits
5.3.2. Extract ledger balance to trial balance
5.3.2.1. Step 1: Collection of ledger accounts
5.3.2.2. Step 2: Balancing ledger accounts
5.3.2.3. Step 3: Collecting the balances
5.3.3. Preparing adjusted trial balance