principles of accounting HT513

Topics: Balance sheet, Expense, Accounting equation Pages: 9 (281 words) Published: July 6, 2015
HT513
PRINCIPLES OF
ACCOUNTING FOR
TOURISM AND
HOSPITALITY
1. Document used after business transaction
2. Book of prime entry

INTRODUCTION OF
BUSINESS
• The purpose of a business is to make a profit for
its owner(s)
• A business is a separate entity from its owner.
• Every financial transaction has a dual effect.
• Double entry bookkeeping accounts for the dual
aspect of financial statement transactions.

INTRODUCTION OF
FINANCIAL STATEMENT
• Information from a trial balance is used to prepare business financial statements in order to evaluate the performance of the business.
• Financial statements has:
- Income statement
- Statement of financial position.
• An income statement is a combination of:
- A trading account
- A profit and loss account

EXAMPLE OF INCOME
STATEMENT

EXAMPLE OF
BALANCED SHEET

INTRODUCTION
BOOK OF PRIME ENTRY
•Book of prime entry is also known as double-entry
bookkeeping which is based on the same idea as the
accounting equation.
•Every accounting transaction has two equal but opposite
effects.
•Equality of assets and liabilities is preserved.
•Therefore, in a system of double entry bookkeeping, every accounting event must be entered in ledger accounts.
•Both as a debit and as an equal but opposite credit.

BOOK OF PRIME ENTRY
DEBIT
•An increase in an
asset
•An increase in an
expense
•A decrease in a
liability (or capital)

CREDIT
• A decrease in an
asset.
• An increase in
income
• An increase in a
liability (or capital).

EXAMPLE OF BOOK PRIME
ENTRY

CONCLUSIONS
• This transaction accounts is important for
every company to ensure the total amount
of profit and loss in every month or year.
• This account will detect the loss and the
expenses used in every company that
happen during the cash flow in and out.

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