Accounting Basics: ACCA/CIMA/CMA/CA/AAT/Cambridge/Edexcel

Define accounting as a process of collecting, recording, classifying, summarizing, and presenting business information for interested parties to make decisions.

Identify internal users (board of directors, management, employees, internal auditors) and external users (shareholders, investors, government, banks, customers, external auditors) who rely on accounts to assess performance.

Discover how financial statements communicate business information to employees, suppliers, customers, and investors, detailing the five components: income statement, balance sheet, cash flow, changes in equity, and notes.

Distinguish bookkeeping from accounting by contrasting recording transactions with providing financial insights through classifying data into income statements, cash flow statements, and statements of financial position.

Financial accounting records past transactions to prepare external financial statements, while management accounting forecasts the future, uses detailed cost data for budgeting and decision making for internal managers.

Discover assets, liabilities, equity, income, and expenses—the elements of financial statements—along with simple definitions and examples, showing how assets generate benefits and liabilities affect equity.

Compute profit or loss by comparing income to expenses, as $100,000 income with $70,000 expenses yields $30,000 profit, and $80,000 income with $90,000 expenses yields $10,000 loss; record annual rent.

learn how the basic accounting equation works, asset equals equity plus liability, using a machine purchase, owner investments, and a bank loan to illustrate funding.

Apply the expanded accounting equation to real transactions by linking assets, equity, liabilities, income, expenses, and drawings, with step-by-step examples.

Explore expanded accounting equation - part 2 - in practice, analyzing 15 transactions to show assets equal equity and liabilities, with income, expenses, and drawings shaping balances.

Learn the dual aspect of transactions through the accounting equation and double entry, applying debits to assets and expenses and credits to liabilities and income.

Explore the accounting cycle from recording transactions and events in primary books with source documents to creating ledgers, a trial balance, five financial statements, and the annual report for stakeholders.

Identify and understand the key source documents that evidence and record trading transactions, including purchase invoices, sales invoices, receipts, credit and debit notes, and bank-related documents.

Explore the eight prime entry books: cash receipt, cash payment, petty cash, purchase, sales, purchase return, sales return, and general journal, and how first-time transactions are recorded from source documents.

This lecture introduces prime entry books, focusing on the cash receipt journal, its columns, and how January transactions like capital, loan, cash sales, and trade receivables are recorded.

Learn to record cash payments in the cash payment journal, manage cash purchases, trade payables, expenses, other payments, discounts, and asset purchases, and transfer totals to ledger accounts.

Learn how to maintain a petty cash journal under the imprest system, recording small expenditures and non-expenditure postings with vouchers, and reconcile opening balances.

Record credit purchases of trading goods in the purchase journal, excluding asset purchases. Post totals to the purchase ledger and transfer to the general ledger to update creditors.

Record credit and cash sales of trading goods in the sales journal, detailing customer, invoice, folio, and amount, then post totals to sales ledger and general ledger as a double-entry.

Record first-time purchase returns in the purchase return journal within the prime entry books, noting debit notes, credit notes, and the return outward journey to reduce trade payables and purchases.

Record sales return transactions in the sales return journal, including credit notes, dates, customers, and folio references. This process reduces sales and trade receivables in the primary book and ledger.

learn how the general journal records transactions not covered by seven prime entry books, and apply the format with narration for entries affecting assets, liabilities, drawings, returns, and bad debts.

Explore how primary books capture transactions before posting to ledgers, including purchase, sales, and general ledgers, and learn how double entries, memorandum accounts, and trial balance support financial statements.

Explore how to record transactions in primary books and ledgers, classify into sales, purchases, and general ledgers, and prepare trial balance plus financial statements.

Learn how trade discounts reduce list prices at point of sale and why only cash discounts are recorded, with journal entries for purchases, sales, and discount allowed or received.

Capital expenditure comprises purchases and improvements of non-current assets that yield benefits beyond one financial year and are capitalized. Revenue expenditure covers short-term operating costs recorded in the income statement.