FABM1 (4th Quarter) Flashcards
Is referred to as the relationship between a company’s assets, liabilities, and equity.
It is one of the most important
Accounting Equation
It is one of the most important equations in accounting and is used for preparing the balance sheet.
Accounting Equation
book of Frater Luca Bartolomeo Pacioli, 36 chapters were devoted to describing double-entry bookkeeping and other commerce-related concepts.
Summa de Arithmetica, Geometria, Proportioni et Proportionalita
is a system in which at least one debit entry (left side) and at least one credit entry (right side) are entered for each transaction.
Double-entry bookkeeping
Is a fundamental convention of accounting that necessitates the recognition of all aspects of an accounting transaction.
Duality
What are the formulas?
˚Assets = Liabilities + Capital (Owner’s Equity)
˚ Owner’s Equity = Assets - Liabilities
˚ Liabilities= Assets - Owner’s Equity
˚
Each specific account title has two sides:
Left side for debit, Right side for credit
Each specific account title has two sides: This is commonly know as
T-Account
- Is a listing of all the accounts and is usually tailored to the operations of the business.
Chart of Accounts
- It functions as a guide to the accountant or the bookkeeper in
Sals of Asset rand suidiss Once
Fumiture & Equipmart, Serice Vehicie or
ensuring uniformity and consistency in the use of all the accounts in recording business transactions.
Chart of Accounts