GROUP 3E

UNISA
FAC1502-SEMESTER 01-2016

STUDY UNIT 1- 5
PREPARED BY RAMASHAU ALUWANI.
2016-02-06

UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E

MENU

Introduction
Objective
Basic Accounting Equation
Accounting Cycle
Types of Journals
General Ledger
Trial Balance
Financial Statements
MUST DO Exercises
INSPIRATIONAL QUOTES

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INTRODUCTION
Dear Group 3E Members!
I would like to take this opportunity to officially welcome you to our first group
activity in this semester. I have summarized notes for study unit 1 to 5 to assist you to
better understand the golden rules.
I expect everyone to go through this slides and ask questions or comment where you
need clarity. You are also expected to go through the selected exercises on slide 17.
For the purpose of group discussion I would like you to submit Revision Exercise on
Page 73 and 74 of the Study Guide. I will appreciate if you all submit this group
assignment under discussion forum on/before 21/02/2016.
Your on-line participation and feedback will be highly appreciated. Remember The
way to get started is to quit talking and begin doing Walt Disney
If you need clarify let me know under on-line discussion.
Kind regards

Mr. Ramashau Aluwani

E-Tutor: FAC1502 (GROUP 3E)
A goal is a dream with a deadline - Napoleon Hill
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UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E

OBJECTIVE OF FINANCIAL ACCOUNTING

Accounting is a process comprises of methods
and procedures for the identification,
recognition, measurement and recording of
financial transactions and events that change
the financial results and position of an entity.
The objective of financial accounting is to
enable the users of financial information to
ascertain readily what the financial results and
financial position of the entity is.
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Basic Accounting Equation (BAE)

Asset is what the entity owns
Equity and Liabilities is what the entity owes
Basic Accounting Equation formula is as follows:
Assets=Equity less Liabilities (A=E+L) OR (E=A-L)
A minimum of two accounts must be used for each
transaction.
The equation must remain in balance after each
transaction. In other words the debit side (A) is equal to
the credit side (E+L)
What is important in this topic is to understand the
Golden Rules
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OVERVIEW OF ACCOUNTING EQUATION

ASSETS
Debit(+) Credit (-)

EQUITY
Debit (-) Credit (+)

LIABILITIES
Debit (-) Credit (+)

Drawings

Capital

NON-CURRENT ASSETS

EXPENSES

INCOME

NON CURRENT LIABILITIES

Land

Cost of sales

Sales

Long term Loan

Building

Rent expenses

Rent Income

Mortgage bond

Furniture

Interest expense

Interest Income

Machinery

Wages & Salaries

Dividend Income

Vehicle

Advertising

Credit Losses recovered

Investments

Insurance

Profit on sale of assets

CURRENT ASSETS

Repairs & Maintenance

Fees earned

CURRENT LIABILITIES

Inventory

Telephone

etc.

Creditors Control

Debtors Control

Water & Electricity

Bank Overdraft

Bank

Packing materials

Accrued Expenses

Petty Cash

Credit losses

Income received in advance

Prepaid expenses

Depreciation

etc.

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Accounting Cycle

Transactions
Completion of source documents
Recording of transactions in journals
Posting to ledgers
Trial balance
Reporting in financial statements
Analysis and interpretation of financial
statements
Decision making by the management
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Accounting Cycle
E.G Paid Telephone by cheque, R 6 800.
Transaction

See example above

Source document

Cheque

Journal

Cash Payment Journal (CPJ)

Ledger or T account

Bank (B5) and Telephone (N9)

Trial Balance

Bank (B5) and Telephone (N9)

Financial Statements

Telephone -Financial Performance

Bank-Financial Position

Very important, read and understand Accounting Cycle on

page 60 of the Study Guide.

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UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E

Types of Journals & Source Documents

Journals

Source Documents

Cash Receipts Journal

(CRJ)

Cash sales, Deposit Slips, Cash register roll, Cash

receipt etc.

Cash Payment Journal

(CPJ)

Cheque counterfoil, Debit notes, cash payment

etc.

Sales Journal (SJ)

Sales invoices (sold goods on credit)etc.

Sales Returns Journal

(SRJ)

Credit note (Damaged goods returned) etc.

Purchases Journal (PJ)

Original invoice (Purchased goods on credit) etc.

Purchases Returns
Journal (PRJ)

Debit note (Returned goods) etc.

Petty Cash Journal (PCJ)

Small items, Petty cash voucher

General Journal (GJ)

Non-cash transactions, Errors and Omissions, Year

end adjustments

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UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E

General Ledger
General Ledger account is also known as T account.
When the subsidiary journals are completed and the
summarized information is transferred to the General
Ledger.
Take note of the Golden rules e.g. Assets increases on
the Debit side (Dr) and Decreases on the Credit side (Cr)
Equity (Capital) and Liabilities (Creditors) increases on
the credit (Cr) side and Decreases on the debit (Dr) side
of the account
Income (e.g Sales) increases Equity
Expense (e.g Wages) decreases equity
Refer to the Study guide
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Trial Balance (TB)

A Trial Balance is a list of the balances brought down (b/d) of
the accounts in the General Ledger of a specific date.
Take note of the all Golden Rule e.g. The balance brought
down(b/d) must be used to prepare the Trial Balance.
Assets and Expenses accounts have Debit (Dr) balances
brought down (b/d) and entered on the debit side of the Trial
Balance.
Equity (Capital), Liability and Income accounts have Credit
(Cr) balances brought down (b/d) and entered on the credit
side of the TB.
Very easy and straight forward topic, its just copy and paste
closing balance from the General Ledger Account
For more info on TB refer to your study guide
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Statement of Comprehensive Income

We use information from Trial Balance under
Nominal Account Section to prepare a Statement of
Comprehensive Income
You need to know the correct framework or structure
of Statement of Comprehensive Income
The financial result of an entity is measured in terms
of profit or loss
Income > Expenses= Profit

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Statement of Changes in Equity

This statement shows all the changes in equity which
have occurred during the financial period.
The purpose is to reconcile the equity at the
beginning of the financial period with the equity at
the end of the financial year. The balance at the end
of the period on the Statement of Changes in Equity
must be the same as Capital reflected in the
Statement of Financial Position.
Very easy and straight forward
Easy marks
Refer to the Study Guide
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Statement of Financial Position

The financial position is always reflected in terms of
three elements in the Basic Accounting Equation,
Assets, Liabilities and Equity
You need to know the correct framework or structure
of Statement of Financial Position (Balance Sheet)
For more info refer to the Study Guide
Assets=Equity + Liabilities (A=E+L)

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Notes to the Financial Statements

Additional information on items appearing in the
financial statements is given in the notes to the
financial statements
Very important, that you read and understand Note
to Property , Plant and Equipment (PPE) from the
Study Guide
PPE and cost price
Methods of calculating depreciation (refer to the
Study Guide)
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Stop & Do Self assessment

Very important, You must understand the

Principles, Principles and Principles!
Its time to evaluate and assess yourself
Very important, this notes are not replacing
the study guide. You are expected to go
through everything starting from Tutorial
letters, Study Guide and Prescribed Textbook
Are you ready for exercises!!!!
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MUST DO EXERCISES
Do the following Exercises in the Study Unit 4 of the Study Guide

Revision Exercise 1 on page 32 to 33

Revision Exercise 2 on page 34
Do the following Exercises in the Study Unit 4 of the Study Guide

Revision Exercise 2 on page 48

Revision Exercise 3 on page 49
Revision Exercise 4 on page 51
Revision Exercise 5 on page 53

Do the following Exercises in the Study Unit 5 of the Study Guide

Revision Exercise on page 73 & 74 -To be submitted under

on-line discussion forum on/before 21/02/2016
Revision Exercise on page 88 and 90
A goal is a dream with a deadline - Napoleon Hill
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SELF ASSESSMENT
NO. TOPIC

STATUS

TICKBOX

STUDY UNIT 1

DONE

STUDY UNIT 2

DONE

STUDY UNIT 3

DONE

STUDY UNIT 4

DONE

STUDY UNIT 5

DONE

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INSPIRATIONAL QUOTES
Road 2 Success, Victory and Prosperity 2016 - Starts here

I have a dream Martin Luther King, Jr.

To accomplish great things, we must not only act, but also dream, not
only plan, but also believe - Anatole France

If you can dream it, you can achieve it. Zig Ziglar
Every great dream begins with a dreamer. Always remember, you have
within you the strength, the patience, and the passion to reach for the
stars to change the world. Harriet Tubman
A goal is a dream with a deadline - Napoleon Hill
All our dreams can come true, if we have the courage to pursue them.
Walt Disney
We all have dreams. But in order to make dreams come into reality, it
takes an awful lot of determination, dedication, self-discipline, and
effort.Jesse Owens

A winner is a dreamer who never gives up Tata Madiba

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YOU ARE ON TRACK!!!

WELL DONE!!!
KEEP IT UP!!!
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