ACFI1001 Lecture Notes - Lecture 2: Double-Entry Bookkeeping System, Accounts Payable, The Ledger
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23 Jul 2018
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An account is the detailed record of all changes that have occurred in a particular asset, liability or owners equity during a period. Transactions are recorded in the journal (a chronological record). Accountants then copy the data to the accounts in the ledger. A list of all the ledger accounts is called a trial balance. An asset is a resource controlled by an entity as a result of past events, that is expected to provide an economic benefit to the entity in future. Most firms use the following asset accounts: cash, accounts receivable, bills receivables, inventories, prepaid expenses, land, buildings and plant&equipment. Liabilities are present obligations of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity. Most liability accounts include: accounts payable, bills payable and accrued liabilities. Owners equity= the financial estimate of owner"s claim to the value in a business.
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