Accounting Equation & Accounting Classification: Prepared By: Nurul Hassanah Binti Hamzah
Accounting Equation & Accounting Classification: Prepared By: Nurul Hassanah Binti Hamzah
Accounting Equation & Accounting Classification: Prepared By: Nurul Hassanah Binti Hamzah
ACCOUNTING EQUATION
& ACCOUNTING
CLASSIFICATION
ACCOUNTING CLASSIFICATION
Assets Liabilities Owner’s
(RM) (RM) Equity
(RM)
CALCULATE THE
100,000 60,000
MISSING ITEMS
USING THE 80,000 30,000
Accounting 100,000 200,000
Equation 65,400 30,000
58,000 23,000
400,000 25,000
Expanded accounting Equation 4
INCOME
THEREFORE,
Derive from
Assets + Expenses = Liabilities + Capital + Income Derive from sale performance of
of goods services (service
(Example: Jun 19, part A, question 6) businesses)
Assets + Expenses = Capital + Income + Liabilities
91, 440 + 76 980 = 50,300 + INCOME/REVENUES + 40, 675
INCOME/REVENUES = 91, 440 + 76 980 - 50, 300 – 40 675
= 77 445
NCA is defined as asset that were
Non- bought not primarily to be sold but to
NCAfor a long
be used in the business
Current
Asset period of time
Land, Building, machinery, equipment,
furniture, fixtures & fittings
INTANGIBLE
TANGIBLE ASSET ASSET (no
(physical) physical
represents the value of all assets that
are reasonably expected to be substance)
Current converted into cash within one year in
assets the normal course of business.
Bank, debtor, cash,
INVESTMENT (Long stock/inventory,
prepaid
Term expenses
Loan and & accrued revenue
Fixed Deposit)
Intangible assets are assets that
Intangible are not physical in nature.
assets patent, trademark and goodwill
LIABILITIES
OWNERS’ EQUITY
Increase in Decrease in
CAPITAL DRAWING
Amount of
assets (cash or
Amounts
invested by the
owner in the
owner’s owner’s goods or fixed
assets) are
taken out from
business for the
acquisition of equity equity
PROFIT/LOSS
the business by
the owner for
assets to the his/her personal
business • Profit • Drawing use.
• Capital • Losses
Effects of transactions on the accounting
equation 10
DATE EFFECTS
INCREASE DECREASE
2 ASSET & OWNER’S EQUITY
6 ASSET ASSET
16 EXPENSES ASSET
Purpose of SOPL
financial position gross and net
of a business in profit/loss of the
terms of its business
assets, liabilities
and capital at
the certain date