Note: Kung sasagot po kayo ng pre and post assessment, sa inline comment po kayo sumagot para ma-check ko. At kung may mga tanong kayo, I already provided a statement for inline comments. Good luck and enjoy learning!
Additional: Ang maraming scores sa post assessments ay bibigyan ko ng tips (any tips, pwedeng tips sa pag-aaral o kung paano sasagot ng business transactions). I'll send it through PM so, answer wisely!
(Before proceeding, kindly minimize your font size for you to have a better illustrations for our lesson today. I'm really sorry for the inconvenience since I only used my tablet for writing. But don't worry, I'll find some ways to let you have a better illustrations for our next lesson.)
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3.0 The Accouting Equation
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For this lesson, students need to understand the elements of the accouting equation and use it to solve an accounting problem.
We discussed in our previous chapter the top 5 major accounts which are assets, liabilities, owner's equity, income and lastly, expenses.
You learned that assets are resources owned by the business and examples are cash, accounts receivable, prepaid expenses, etc.
Liabilities are obligations by the business. Examples are accounts and notes payable.
And you learned that OE (Owner's Equity) is the residual interest of the owner of the business. This means that any assets left after paying liabilities are the rights of the owner of the business.
Now let's proceed to our main topic: the accounting equation.
The accounting equation: Assets is equal to liabilites and equity or owner's equity.
To illustrate: ASSETS = LIABILITIES + EQUITY
Remember: the accounting equation should always be balanced.
To effectively understand the accounting equation, here are the examples:
On January 1, Ms. Yoan invested cash Php150,000 to her business.
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ASSETS = LIABILITIES + EQUITY
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Cash = + Yoan, Capital
Php150,000 Php150,000
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In the illustration above, only assets and equity are increased while liabilities is not affected. Why? Because Ms. Yoan only invested money to her business and didn't had any obligations. Makikita mo rin sa illustration na balance ang assets at equity.
On January 3, Ms. Yoan purchased office equipment amounting to Php20,000 on cash basis.
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ASSETS = LIABILITIES + EQUITY
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Cash = + Yoan, Capital
Php130,000 Php150,000
Equipment
Php20,000
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Nagtataka ka siguro kung bakit naging Php130,000 na lang ang Cash kung originally Php150,000 'to? Read the transaction again. Sabi ro'n, Ms. Yoan purchased office equipment on cash basis. Ibig sabihin, gumamit siya ng cash para bilhin niya 'yong equipment for Php20,000. And for the equity, hindi siya apektado kasi wala naman kailangan i-de-decrease. 'Di ba, balanse pa rin sila?
BINABASA MO ANG
Wonders of Accounting
Non-FictionThis book is dedicated to those students that will choose Accountancy, Business and Management (ABM) as their academic track in Senior High School (SHS). Book cover by HOTARU_ZEROTWO Enjoy learning!
