Docstoc

Business Information Systems

Document Sample
Business Information Systems Powered By Docstoc
					Business Information Systems

   Business Accounting - Part 1
What is accounting?
   It is used in the business world to describe the
    transactions entered into by all kinds of
    organizations.
   It is used to answer two main questions:
       Whether or not the business is operating at a profit
       Whether or not the business will be able to meet its commitments
The Accounting Equation
        Assets                  Capital                   Liabilities

   Assets - Resources possessed by the firm.
       Property such as buildings, machinery, stocks of goods, cars
       Benefits such as debts owing by customers
       Money in bank account
   Capital - Resources supplied by owner of business.
       Owner’s equity or net worth
   Liabilities - Resources supplied by someone other than owner.
       Money owing for goods supplied to the firm
       Expenses
       Loans made to firm
Balance Sheet Example - 1
            Computer Services Co. Ltd.
          Balance Sheet as at 1st May 2009
Assets         Euro                  Euro
Cash at Bank   5000      Capital     5000
               5000                  5000
Balance Sheet Example - 2
             Computer Services Co. Ltd.
          Balance Sheet as at 2nd May 2009
Assets          Euro                         Euro
Buildings       3000          Capital        5000
Cash at Bank    2000
                5000                         5000




               The purchase of an asset by cheque.
  Computer Services Co.Ltd. buys a building for Euro 3000.
Balance Sheet Example - 3
              Computer Services Co. Ltd.
           Balance Sheet as at 3rd May 2009
Assets           Euro                         Euro
Buildings        3000         Capital         5000
Stock of Goods    500         Creditor         500
Cash at Bank     2000
                 5500                         5500



   The purchase of an asset and the incurring of a liability.
  Computer Services Co.Ltd. buys some goods from Target
          and agrees to pay them in two weeks.
Balance Sheet Example - 4
             Computer Services Co. Ltd.
           Balance Sheet as at 4th May 2009
Assets           Euro                          Euro
Buildings        3000           Capital        5000
Stock of Goods    400           Creditor        500
Debtor            100
Cash at Bank     2000
                 5500                          5500


                  The sale of an asset on credit.
   Computer Services Co.Ltd. sells some goods which cost
  Euro 100 to Mr Borg for the same amount to be paid later.
Balance Sheet Example - 5
             Computer Services Co. Ltd.
           Balance Sheet as at 5th May 2009
Assets           Euro                      Euro
Buildings        3000        Capital       5000
Stock of Goods    350        Creditor       500
Debtor            100
Cash at Bank     2050
                 5500                      5500


         The sale of an asset for immediate payment.
  Computer Services Co.Ltd. sells some goods which cost
  Euro 50 to Mr Abela for the same amount. Mr Abela paid
                 immediately by cheque.
Balance Sheet Example - 6
             Computer Services Co. Ltd.
           Balance Sheet as at 6th May 2009
Assets           Euro                            Euro
Buildings        3000          Capital           5000
Stock of Goods    350          Creditor           300
Debtor            100
Cash at Bank     1850
                 5300                            5300


                   The payment of a liability.
 Computer Services Co.Ltd. pays Euro 200 to Target in part
             payment of the amount owing.
Balance Sheet Example - 7
             Computer Services Co. Ltd.
           Balance Sheet as at 7th May 2009
Assets           Euro                            Euro
Buildings        3000          Capital           5000
Stock of Goods    350          Creditor           300
Debtor            25
Cash at Bank     1925
                 5300                            5300


                   The collection of an asset.
   Mr Borg makes a part payment of Euro75 to Computer
                    Services Co.Ltd.
Transaction Examples
Buy goods on credit     Increase Asset       Increase Liability
                        (Stock of Goods)     (Creditors)

Buy goods by cheque     Increase Asset       Decrease Asset
                        (Stock of Goods)     (Bank)

Pay creditor by         Decrease Asset       Decrease Liability
cheque                  (Bank)               (Creditors)

Owner pays more         Increase Asset       Increase Capital
capital into the bank   (Bank)

Owner takes money       Decrease Asset       Decrease Capital
out of the business     (Bank)
bank for his own use
Owner pays creditor     Decrease Liability   Increase Capital
from private money      (Creditors)
outside the firm

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:8
posted:9/29/2011
language:English
pages:11