Mba 501

Welcome to our
Presentation
Forest
1. Name : Naima Ferdousi Tupma
ID : 2020-3-95-030
2. Name : F. M. Tanvir Rahim
ID : 2020-1-95-017
3. Name : Tanvin Hossain Tonni
ID : 2019-2-95-046
4. Name : Yesmin Chowdhury
ID : 2020-2-95-002
5. Name : Sk. Nazmus Sadab
ID : 2020-3-95-088
ACCOUNTING EQUATION
Assets = Liabilities + Owner’s Equity
Left side:
Assets
ACCOUNTING EQUATION
Assets = Liabilities + Owner’s Equity
Right side shows where

the money came from to
buy the assets
ASSETS
• EXAMPLES:
CASH MACHINERY
MERCHANDISE BUILDINGS
FURNITURE LAND
FIXTURES
ACCOUNTS RECEIVABLE
LIABILITIES
• EXAMPLES:
ACCOUNTS PAYABLE
NOTES PAYABLE
QUESTION
Does accounting equation balance?
ASSETS = LIABILITIES + OWNER’S EQUITY

CASH = M. A.CAPITAL
+$25,000 = +$25,000
It Balances!
Assets of $25,000 = Liab. of $0
plus Owner’s Equity of $25,000
FINANCIAL STATEMENTS
THREE COMMONLY PREPARED FINANCIAL
STATEMENTS:
oINCOME STATEMENT
oSTATEMENT OF OWNER’S EQUITY
oBALANCE SHEET
oStatement of Cash Flows
INCOME STATEMENT
Reports the profitability of business operations
For a specific period of time
Expenses are subtracted from Revenues to determine Net
Income/Loss
Also called Profit and Loss Statement or Operating Statement
Jessica Jane’s Campus Delivery
Income Statement
For Month Ended June 30, 20--
Revenues:
Consulting Fees $2,150
Expenses:
Wages Expense $ 650
Rent Expense 200
Telephone Expense 50
Total Expenses 900
Net Income $1,250
Double underline
STATEMENT OF OWNER’S
EQUITY
Reports the activities that affected Owner’s Equity
For a specific period of time
Uses Net Income from Income Statement
Statement of Owner’s Equity
For Month Ended June 30, 20--
Jessica Jane, capital, June 1, 20-- $2,000

Net Income for June $1,250
Less withdrawal for June 150
Increase in Capital 1,100
Jessica Jane, capital, June 30, 20-- $3,100
$2,000 beginning O. E. + $1,100 increase =

$3,100
BALANCE SHEET
Confirms the accounting equation has
remained in balance
Includes: Assets, Liabilities, Owner’s Equity
Also called Statement of Financial Position or
Statement of Financial Condition
Balance Sheet
June 30, 20--
Assets Liabilities
Cash $ 370 Accounts Payable $1,800
Accounts Receivable 650
Supplies 80 Owner’s Equity
Prepaid Insurance 200 Jessica Jane, Capital 3,100

Delivery Equipment 3,600
Total Liabilities and
Total Assets $4,900 Owner’s Equity $4,900
It Balances!!!
Statement of Cash Flows
In the Statement of Cash Flows -definition of cash includes both
cash AND - cash equivalents.
Which are
• Short term highly liquid instruments maturing in not more than
90 days.
• Treasury Bills ( T-Bills)
• Short Term Certificates of Deposits (CDs)
• Commercial Paper (CPs)
Careers opportunity in Accounting
• Government and Non Profit Private Accounting Jobs:
accounting jobs: Accounting Clerk
• Fund Accountancy Accounts Payable/Receivable Clerk
• IRS Jobs Accounting Information System Specialist
Actuarial Accountant/Insurance Accountant
• Public Accounting Jobs:
Bookkeeping
• Cost Estimator Budget Analyst
• Enrolled Agent Capital Accountant
• Forensic Accountant Comptroller/Financial Controller
Cost Accountant
• Real Estate Appraiser
Financial Services:
• Business Valuation Specialist
• Certified Financial Planner
• Financial Analyst
• Tax Consultant
What is an Accountant and What Do They Do?
• These are among the many tasks that accountants perform for their clients:
• Organizing and maintaining financial records
• Evaluating financial operations and making recommendations to management about
best financial practices
• Examining account books and accounting systems to make sure they are efficient and
conform to accepted standards and accounting procedures
• Preparing tax returns and related tasks
• Examining financial statements to make sure they are accurate and meet legal
requirements
• Suggesting ways to increase revenue, reduce costs, and improve profits
• Careers in Different Areas of Accounting
• Public accounting
• Management accounting
• Governmental accounting
• Internal auditing
Explain the career opportunities in accounting
• Government Accounting
• Internal Auditing
• Other Types of Accounting Jobs
• Financial Accounting vs. Management Accounting
How accounts, debits, and credits are used to
record business transactions:
• Accounts: An account is a record in an accounting system that tracks the financial
activities of a specific assets, liability, equity, revenue, or expense.
• Debits: A debit is accounting entries that either increase an asset or expense account,
or decrease a liability or equity account.
• Credits: A credit is an accounting entry that either increases a liability or equity
account, or decreases an asset or expense account.
• Debt and credit procedures:

• Double entry system
• Each transaction must affect two or more accounts to keep the basic accounting
equation in balance
• Recording done by debiting at least one account and crediting at least one account and
crediting at least one other account.
• Debits must equal credits.
Debit and credit procedures for assets and
liabilities:
• A debit increases asset or expense accounts and decreases liability, revenue or equity
accounts.
Debit and credit procedures for owner’s equity:
• Owner’s capital: Owner’ capital, also called owner’s equity, is the equity account that
shows the owner’s stake in the business. In other words, this account shows the how
much of the company assets are owned by the owners instead of creditors.
• Owner’s drawings: An owner may withdraw cash or other assets for personal use.
Withdrawals could be debited directly to owner’s capital to indicate a decrease in
owner equity. However, it is preferable to use a separate account, called owner’s
Drawings.
• Revenue and expense: Revenue describes income earned through the provision of a
business’s primary goods or services, an expense is cost incurred in the process of
producing or offering a primary business operation.
Thank You for Your
Patience

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Welcome to our

Right side shows where

ASSETS = LIABILITIES + OWNER’S EQUITY

Jessica Jane, capital, June 1, 20-- $2,000

$2,000 beginning O. E. + $1,100 increase =

Prepaid Insurance 200 Jessica Jane, Capital 3,100

• Debt and credit procedures:

Debit and credit procedures for owner’s equity:

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