An Introduction to Accounting (Grade 11 NSC Matric Accounting): Flashcards
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Practise the cards
10 cards from this deck
Accounting equation formula
Accounting equation formula
A = OE + L (Assets = Owner's Equity + Liabilities)
Historical cost concept
Historical cost concept
Record assets at purchase price, maintain original cost
Business entity concept
Business entity concept
Business is separate from owner; keep transactions separate
Matching concept
Matching concept
Record expenses in same period as income they helped earn
Double entry system rule
Double entry system rule
Every transaction affects at least 2 accounts: debit & credit
Assets: which side increases?
Assets: which side increases?
Debit side (left)
Owner's equity & liabilities: which side increases?
Owner's equity & liabilities: which side increases?
Credit side (right)
What is a Trial Balance?
What is a Trial Balance?
List of all ledger accounts showing their balances
Accrual basis
Accrual basis
Record income/expenses when earned/incurred, not when cash paid
Purpose of financial statements
Purpose of financial statements
Present transactions in standardised format for analysis
