principles of accounting HT513
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.
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.