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Accounting Basics - Coggle Diagram
Accounting Basics
Journals / Books of original entries
Sales Day Book
Purchase Day Book
Return Inwards Day Book
Returns outwards Day Book
Cash Book
General Journal
Bank reconciliation
e. Un-presented cheques
d. Un-credited cheques
c. Bank charges / interest earned
b. NSF / Bounced cheques
a. Errors in cash book record
Accounting equation: Assets = Liabilities + Capital
Assets: Current / Fixed or Non-current
Cash / Stock / Accounts Receivable / prepayment / Property / Machinery ...
Liabilities: Current / Long term or Non-current
Accounts payable / advance payment received / loan from bank
Capital
Owner's contributions
Accounts/Ledgers
2-colum T-accounts
3-column accounts
Balance off accounts
Trial Balance: total debit = total credit
Steps in bank reconciliation
Update cash book with a, b & c
Identify differences between cash book Vs bank statement
Bank reconciliation statement:
Balance as per cash book: Add un-presented cheques less uncredited cheques
Double entry system
Debit: left hand entry
Assets Increase; liabilities & capital decrease
Credit: right hand entry
Assets decrease; liabilities & capital increase
Financial Statements
Statement of Profit & Loss
Net Sales less COGS = Gross Profit (Trading Account)
Gross Profit less expenses = Net Profit
Statement of financial Position
Fixed Assets add Current assets = Total assets
Current assets less current liabilities = working capital
Total assets less total liabilities = Net assets => Capital
Petty Cash