Accounting Mechanics: DR Amit Kumar Sinha
Accounting Mechanics: DR Amit Kumar Sinha
Accounting Mechanics: DR Amit Kumar Sinha
ACCOUNTING
MECHANICS
1
ACCOUNTING EQUIVALENCE
Assets = Owner’s Equity +
Outside Liabilities
A = OE + OL
2
DOUBLE ENTRY SYSTEM
A = OE + OL
Debit = Credit
In
In the
the double-entry
double-entry accounting
accounting system,
system,
every
every transaction
transaction is
is recorded
recorded by
by equal
equal
amounts
amounts of
of debits
debits and
and credits.
credits.
3
ACCOUNTANT’S LIFE
A = OE + OL
ASSETS LIABILITIES EQUITIES
Debit Credit Debit Credit Debit Credit
for for for for for for
Increase Decrease Decrease Increase Decrease Increase
5
ACCOUNTANT’S ROUTINE
Source
Transaction documents Analyze
Balance Sheet
Prepare a trial Post to the Journal Entry
P & L A/c ledger
balance
Cash Flow
6
ACCOUNTANT’S ROUTINE
Source
Transaction documents Analyze
Balance Sheet
Prepare a trial Post to the Journal Entry
P & L A/c ledger
balance
Cash Flow
7
TRANSACTION-1
Chirag started business with cash $
30,000.
The accounts involved are:
(1) Cash (asset)
(2) Owner’s Equity (equity)
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TRANSACTION-1
Chirag started
ASSETS business with cash Rs.
EQUITIES
30,000.
The accounts involved are:
Debit
(1) Cash (Credit
asset) Debit Credit
-
(2)+Owner’s Equity (equity)- +
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TRANSACTION-1 - LEDGER
10
Thank You Now, was that debits
to the left or credits
to the left?
I sure wish I had paid
more attention in
class!
Email: [email protected]
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