Accounting

Accounting Equation
Equation
 Accounting Equation
Assets
Assets = Liabilities
Liabilities + Equity
Equity

Liabilities
Assets & Equity
 Assets
Cash
Cash

Debtors
Debtors Bank
Bank
Resources
Resources
owned
owned oror
Vehicles controlled
controlled
Vehicles Land
by
by aa Land
company
company
Buildings
Buildings
Stock
Stock
Equipment
Equipment
 Liabilities

Creditors
Creditors Loan
Loan

Creditors’
Creditors’
claims
claims on
on
assets
assets
Accrued
Accrued
Expenses
Expenses
 Equity
Owner
Owner Drawings
Drawings
Investments
Investments

Owner’s
Owner’s
claims
claims
on
on
assets
assets
Revenues
Revenues Expenses
Expenses
 Transaction Analysis
Equation
The accounting equation must remain in
balance after each transaction.
Assets
Assets = Liabilities
Liabilities + Equity
Equity

Let see the impacts on

balance sheet