Accounting Entity Concept Flashcards

1
Q

What is the accounting entity concept?

A

Artificial construct that defines the boundaries of an organisational unit which is the object of focus of the particular accounting process.

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2
Q

What is the equation used?

A

Capital = Assets - Liabilities.

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3
Q

What balance do assets have?

A

Debit.

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4
Q

What balance do liabilities have?

A

Credit.

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5
Q

Effects of value going up and down:

A
  • If an asset goes down in value it becomes credit.

- If an asset goes up in value it becomes debit.

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