Topic: Accounting Equation
Speaker: M. Ray Gregg
Main Points of Session:
- Accounting is the language of business
- Luca Pacioli (1445- 1517) is the father of Accounting, who described a system to ensure that financial information was recorded efficiently and accurately
- Business Entity Concept: Economic units (Business) considered separate and distinct from its owner means the owner and business are separate and the accounting is for business
- Business Transaction: Events, occurrence, or condition that need to be recorded; usually in monetary terms
- Users of Accounting Information:
- Profit Making Entities (Business)
- Non Profit Organizations
- Government
- Individuals
- Assets: "Resources owned by the business" or "Things of value that are owned"
- Equities: Right or Claim to properties (assets)
- Type of Equities:
- Liabilities (debts, things owed)
- Owner’s Equity/ Capital
Assets = Equities + Capital
- Revenue: Assets coming into the business because of work performed
- Expense: Sacrifices made in order to earn revenue
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