Contents

Chapter 01: ACCOUNTING INFORMATION: A MEANS TO AN END ........... Error! Bookmark not
defined.
ACCOUNTING INFORMATION: A MEANS TO AN END ................... Error! Bookmark not defined.
ACCOUNTING ............................................................................................. Error! Bookmark not defined.
Stakeholders of Business Organizations .................................................... Error! Bookmark not defined.
Purpose of Accounting ............................................................................... Error! Bookmark not defined.
Stakeholders and Stockholders.................................................................. Error! Bookmark not defined.
Internal Stakeholder and External Stakeholder ......................................... Error! Bookmark not defined.
Financial Statements ..................................................................................... Error! Bookmark not defined.
BASIC/PRIMARY FINANCIAL STATEMENTS .................................... Error! Bookmark not defined.
Balance Sheet............................................................................................. Error! Bookmark not defined.
Assets ......................................................................................................... Error! Bookmark not defined.
Liabilities .................................................................................................... Error! Bookmark not defined.
Owners Equity ........................................................................................... Error! Bookmark not defined.
Income Statement ..................................................................................... Error! Bookmark not defined.
Revenue ..................................................................................................... Error! Bookmark not defined.
Expense ...................................................................................................... Error! Bookmark not defined.
Cash Flow Statement ................................................................................. Error! Bookmark not defined.
Difference between Cost and Expense ...................................................... Error! Bookmark not defined.
RELATIONSHIP BETWEEN BALANCE SHEET AND INCOME STATEMENT Error! Bookmark
not defined.

Chapter 02: ACCOUNTING EQUATION AND THE BASIC FINANCIAL STATEMENTS... Error!
Bookmark not defined.
THE ACCOUNTING EQUATION............................................................. Error! Bookmark not defined.
BALANCE SHEET ....................................................................................... Error! Bookmark not defined.
Effects of Business Transactions on the Balance Sheet and Accounting EquationError! Bookmark not
defined.
Effect of each Business Transactions on Accounting Equation ................. Error! Bookmark not defined.
INCOME STATEMENT.............................................................................. Error! Bookmark not defined.
CASH FLOWS STATEMENT .................................................................... Error! Bookmark not defined.
Business Organizations ................................................................................. Error! Bookmark not defined.
Service Business ......................................................................................... Error! Bookmark not defined.
Merchandising/Trading Business ............................................................... Error! Bookmark not defined.
Manufacturing Business............................................................................. Error! Bookmark not defined.
Types of business organization .................................................................... Error! Bookmark not defined.
Sole proprietorship .................................................................................... Error! Bookmark not defined.
Partnership................................................................................................. Error! Bookmark not defined.
Corporations .............................................................................................. Error! Bookmark not defined.
RELATIONSHIP AMONG FINANCIAL STATEMENTS ..................... Error! Bookmark not defined.

Chapter 03: THE BASIC ACCOUNTING CYCLE

The Role of Accounting Records

THE LEDGER

THE USE OF ACCOUNTS

Types of Accounts

BUSINESS TRANSACTION

Types of Business Transaction

Rules for Deciding Whether a Transaction is Cash or Credit

RULES OF DEBIT AND CREDIT

DEBIT AND CREDIT ENTRIES

The Equality of Debits and CreditsDouble Entry System

How Transactions are recorded in Ledger Accounts (An Illustration)

THE JOURNAL

How journal Entries are Posted to the Ledger AccountsHow to read Journal Entries

Chapter 04: THE ACCOUNTING CYCLE: TRIAL BALANCE

Why Trial Balance is Prepared?

Uses and Limitations of Trial Balance

Methods of Preparing Trial Balance

Totals Method

Balance Method

Chapter 05: THE ACCOUNTING CYCLE: ADJUSTED ENTRIESA STEP

FURTHER IN ACCOUNTING CYCLE

Need for Adjusting Entries

Forms of Adjusting Entries

Characteristics of Adjusting Entries

Effects of Adjusting Entries

How Assets Turn in to an Expense

What is Depreciation?

How Depreciations is Recorded as an Expense: An Illustration

Closing the Accounts

Adjusted Trial Balance

Chapter 06: ACCOUNTING CYCLE FOR MERCHANDISING ACTIVITIES

MERCHANDISING COMPANIES

Operating Cycle for Merchandising Companies

Income Statement for Merchandising Company

What Type of Information Merchandising Company Need

Ledger Accounts

Subsidiary Ledger

Approaches Used in Accounting for Merchandising Companies

TRANSACTIONS RELATING TO PURCHASE

TRANSACTIONS RELATING TO SALE

EVALUATING PERFORMANCE OF MERCHANDISING COMPANIES

Chapter 07: PREPARING FINANCIAL STATEMETNSTHE

COMPLETION OF ACCOUNTING CYCLE
INCOME STATEMENT

OWNERS EQUITY STATEMETN

BALANCE SHEET

CASH FLOWS STATEMENT

Relationship between Financial Statements

CLOSING THE TEMPORARY ACCOUNTS

Closing Entries for Revenue Accounts

Closing Entries for Expense Accounts

Closing the Income Summary Account

Closing the Drawings Account

Summary of Closing Process

After Closing Trial Balance

ACCOUNTING CYCLE IN PERSPECTIVE

A COMPREHENSIVE ACCOUNTING CYCLE ILLUSTRATION