GROUP 3E
UNISA
FAC1502-SEMESTER 01-2016
STUDY UNIT 1- 5
PREPARED BY RAMASHAU ALUWANI.
2016-02-06
UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E
MENU
Introduction
Objective
Basic Accounting Equation
Accounting Cycle
Types of Journals
General Ledger
Trial Balance
Financial Statements
MUST DO Exercises
INSPIRATIONAL QUOTES
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INTRODUCTION
Dear Group 3E Members!
I would like to take this opportunity to officially welcome you to our first group
activity in this semester. I have summarized notes for study unit 1 to 5 to assist you to
better understand the golden rules.
I expect everyone to go through this slides and ask questions or comment where you
need clarity. You are also expected to go through the selected exercises on slide 17.
For the purpose of group discussion I would like you to submit Revision Exercise on
Page 73 and 74 of the Study Guide. I will appreciate if you all submit this group
assignment under discussion forum on/before 21/02/2016.
Your on-line participation and feedback will be highly appreciated. Remember The
way to get started is to quit talking and begin doing Walt Disney
If you need clarify let me know under on-line discussion.
Kind regards
Mr. Ramashau Aluwani
E-Tutor: FAC1502 (GROUP 3E)
A goal is a dream with a deadline - Napoleon Hill
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UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E
OBJECTIVE OF FINANCIAL ACCOUNTING
Accounting is a process comprises of methods
and procedures for the identification,
recognition, measurement and recording of
financial transactions and events that change
the financial results and position of an entity.
The objective of financial accounting is to
enable the users of financial information to
ascertain readily what the financial results and
financial position of the entity is.
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Basic Accounting Equation (BAE)
Asset is what the entity owns
Equity and Liabilities is what the entity owes
Basic Accounting Equation formula is as follows:
Assets=Equity less Liabilities (A=E+L) OR (E=A-L)
A minimum of two accounts must be used for each
transaction.
The equation must remain in balance after each
transaction. In other words the debit side (A) is equal to
the credit side (E+L)
What is important in this topic is to understand the
Golden Rules
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UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E
OVERVIEW OF ACCOUNTING EQUATION
ASSETS
Debit(+) Credit (-)
EQUITY
Debit (-) Credit (+)
LIABILITIES
Debit (-) Credit (+)
Drawings
Capital
NON-CURRENT ASSETS
EXPENSES
INCOME
NON CURRENT LIABILITIES
Land
Cost of sales
Sales
Long term Loan
Building
Rent expenses
Rent Income
Mortgage bond
Furniture
Interest expense
Interest Income
Machinery
Wages & Salaries
Dividend Income
Vehicle
Advertising
Credit Losses recovered
Investments
Insurance
Profit on sale of assets
CURRENT ASSETS
Repairs & Maintenance
Fees earned
CURRENT LIABILITIES
Inventory
Telephone
etc.
Creditors Control
Debtors Control
Water & Electricity
Bank Overdraft
Bank
Packing materials
Accrued Expenses
Petty Cash
Credit losses
Income received in advance
Prepaid expenses
Depreciation
etc.
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UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E
Accounting Cycle
Transactions
Completion of source documents
Recording of transactions in journals
Posting to ledgers
Trial balance
Reporting in financial statements
Analysis and interpretation of financial
statements
Decision making by the management
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Accounting Cycle
E.G Paid Telephone by cheque, R 6 800.
Transaction
See example above
Source document
Cheque
Journal
Cash Payment Journal (CPJ)
Ledger or T account
Bank (B5) and Telephone (N9)
Trial Balance
Bank (B5) and Telephone (N9)
Financial Statements
Telephone -Financial Performance
Bank-Financial Position
Very important, read and understand Accounting Cycle on
page 60 of the Study Guide.
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Types of Journals & Source Documents
Journals
Source Documents
Cash Receipts Journal
(CRJ)
Cash sales, Deposit Slips, Cash register roll, Cash
receipt etc.
Cash Payment Journal
(CPJ)
Cheque counterfoil, Debit notes, cash payment
etc.
Sales Journal (SJ)
Sales invoices (sold goods on credit)etc.
Sales Returns Journal
(SRJ)
Credit note (Damaged goods returned) etc.
Purchases Journal (PJ)
Original invoice (Purchased goods on credit) etc.
Purchases Returns
Journal (PRJ)
Debit note (Returned goods) etc.
Petty Cash Journal (PCJ)
Small items, Petty cash voucher
General Journal (GJ)
Non-cash transactions, Errors and Omissions, Year
end adjustments
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UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E
General Ledger
General Ledger account is also known as T account.
When the subsidiary journals are completed and the
summarized information is transferred to the General
Ledger.
Take note of the Golden rules e.g. Assets increases on
the Debit side (Dr) and Decreases on the Credit side (Cr)
Equity (Capital) and Liabilities (Creditors) increases on
the credit (Cr) side and Decreases on the debit (Dr) side
of the account
Income (e.g Sales) increases Equity
Expense (e.g Wages) decreases equity
Refer to the Study guide
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Trial Balance (TB)
A Trial Balance is a list of the balances brought down (b/d) of
the accounts in the General Ledger of a specific date.
Take note of the all Golden Rule e.g. The balance brought
down(b/d) must be used to prepare the Trial Balance.
Assets and Expenses accounts have Debit (Dr) balances
brought down (b/d) and entered on the debit side of the Trial
Balance.
Equity (Capital), Liability and Income accounts have Credit
(Cr) balances brought down (b/d) and entered on the credit
side of the TB.
Very easy and straight forward topic, its just copy and paste
closing balance from the General Ledger Account
For more info on TB refer to your study guide
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Statement of Comprehensive Income
We use information from Trial Balance under
Nominal Account Section to prepare a Statement of
Comprehensive Income
You need to know the correct framework or structure
of Statement of Comprehensive Income
The financial result of an entity is measured in terms
of profit or loss
Income > Expenses= Profit
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Statement of Changes in Equity
This statement shows all the changes in equity which
have occurred during the financial period.
The purpose is to reconcile the equity at the
beginning of the financial period with the equity at
the end of the financial year. The balance at the end
of the period on the Statement of Changes in Equity
must be the same as Capital reflected in the
Statement of Financial Position.
Very easy and straight forward
Easy marks
Refer to the Study Guide
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Statement of Financial Position
The financial position is always reflected in terms of
three elements in the Basic Accounting Equation,
Assets, Liabilities and Equity
You need to know the correct framework or structure
of Statement of Financial Position (Balance Sheet)
For more info refer to the Study Guide
Assets=Equity + Liabilities (A=E+L)
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Notes to the Financial Statements
Additional information on items appearing in the
financial statements is given in the notes to the
financial statements
Very important, that you read and understand Note
to Property , Plant and Equipment (PPE) from the
Study Guide
PPE and cost price
Methods of calculating depreciation (refer to the
Study Guide)
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Stop & Do Self assessment
Very important, You must understand the
Principles, Principles and Principles!
Its time to evaluate and assess yourself
Very important, this notes are not replacing
the study guide. You are expected to go
through everything starting from Tutorial
letters, Study Guide and Prescribed Textbook
Are you ready for exercises!!!!
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MUST DO EXERCISES
Do the following Exercises in the Study Unit 4 of the Study Guide
Revision Exercise 1 on page 32 to 33
Revision Exercise 2 on page 34
Do the following Exercises in the Study Unit 4 of the Study Guide
Revision Exercise 2 on page 48
Revision Exercise 3 on page 49
Revision Exercise 4 on page 51
Revision Exercise 5 on page 53
Do the following Exercises in the Study Unit 5 of the Study Guide
Revision Exercise on page 73 & 74 -To be submitted under
on-line discussion forum on/before 21/02/2016
Revision Exercise on page 88 and 90
A goal is a dream with a deadline - Napoleon Hill
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SELF ASSESSMENT
NO. TOPIC
STATUS
TICKBOX
STUDY UNIT 1
DONE
STUDY UNIT 2
DONE
STUDY UNIT 3
DONE
STUDY UNIT 4
DONE
STUDY UNIT 5
DONE
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INSPIRATIONAL QUOTES
Road 2 Success, Victory and Prosperity 2016 - Starts here
I have a dream Martin Luther King, Jr.
To accomplish great things, we must not only act, but also dream, not
only plan, but also believe - Anatole France
If you can dream it, you can achieve it. Zig Ziglar
Every great dream begins with a dreamer. Always remember, you have
within you the strength, the patience, and the passion to reach for the
stars to change the world. Harriet Tubman
A goal is a dream with a deadline - Napoleon Hill
All our dreams can come true, if we have the courage to pursue them.
Walt Disney
We all have dreams. But in order to make dreams come into reality, it
takes an awful lot of determination, dedication, self-discipline, and
effort.Jesse Owens
A winner is a dreamer who never gives up Tata Madiba
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YOU ARE ON TRACK!!!
WELL DONE!!!
KEEP IT UP!!!
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