GROUP 3EUNISA 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 1 MENU • • • • • • • • • • Introduction Objective Basic Accounting Equation Accounting Cycle Types of Journals General Ledger Trial Balance Financial Statements MUST DO Exercises INSPIRATIONAL QUOTES 2016-02-06 UNISA E-TUTOR- A. RAMASHAU FAC1502-S1-2016-GROUP 3E 2 I will appreciate if you all submit this group assignment under discussion forum on/before 21/02/2016. Kind regards Mr. I have summarized notes for study unit 1 to 5 to assist you to better understand the golden rules. You are also expected to go through the selected exercises on slide 17.INTRODUCTION Dear Group 3E Members! I would like to take this opportunity to officially welcome you to our first group activity in this semester. Your on-line participation and feedback will be highly appreciated.A. I expect everyone to go through this slides and ask questions or comment where you need clarity.Napoleon Hill 2016-02-06 UNISA E-TUTOR. 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. Ramashau Aluwani E-Tutor: FAC1502 (GROUP 3E) A goal is a dream with a deadline . For the purpose of group discussion I would like you to submit Revision Exercise on Page 73 and 74 of the Study Guide. RAMASHAU FAC1502-S1-2016-GROUP 3E 3 . recognition.OBJECTIVE OF FINANCIAL ACCOUNTING • Accounting is a process comprises of methods and procedures for the identification. 2016-02-06 UNISA E-TUTOR. • 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. RAMASHAU FAC1502S1-2016-GROUP 3E 4 . measurement and recording of financial transactions and events that change the financial results and position of an entity.A. 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 2016-02-06 UNISA E-TUTOR. • The equation must remain in balance after each transaction.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.A. RAMASHAU FAC1502-S1-2016-GROUP 3E 5 . A.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. 2016-02-06 UNISA E-TUTOR. RAMASHAU FAC1502-S1-2016-GROUP 3E 6 . 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. RAMASHAU FAC1502-S1-2016-GROUP 3E 7 .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 2016-02-06 UNISA E-TUTOR.A. G Paid Telephone by cheque.Accounting Cycle E. R 6 800. read and understand Accounting Cycle on page 60 of the Study Guide. 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. RAMASHAU FAC1502-S1-2016-GROUP 3E 8 . 2016-02-06 UNISA E-TUTOR.A. Petty Cash Journal (PCJ) Small items. cash payment etc. Cash Payment Journal (CPJ) Cheque counterfoil. Debit notes. RAMASHAU FAC1502-S1-2016-GROUP 3E 9 . Sales Journal (SJ) Sales invoices (sold goods on credit)etc.Types of Journals & Source Documents Journals Source Documents Cash Receipts Journal (CRJ) Cash sales. Sales Returns Journal (SRJ) Credit note (Damaged goods returned) etc. Cash register roll.A. Errors and Omissions. Purchases Returns Journal (PRJ) Debit note (Returned goods) etc. Purchases Journal (PJ) Original invoice (Purchased goods on credit) etc. Cash receipt etc. Deposit Slips. Year end adjustments 2016-02-06 UNISA E-TUTOR. Petty cash voucher General Journal (GJ) Non-cash transactions. • When the subsidiary journals are completed and the summarized information is transferred to the General Ledger. 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. RAMASHAU FAC1502-S1-2016-GROUP 3E 10 . • Take note of the Golden rules e.General Ledger • General Ledger account is also known as T account.A.g Sales) increases Equity • Expense (e.g.g Wages) decreases equity • Refer to the Study guide 2016-02-06 UNISA E-TUTOR. RAMASHAU FAC1502-S1-2016-GROUP 3E 11 .A. • Take note of the all Golden Rule e. Liability and Income accounts have Credit (Cr) balances brought down (b/d) and entered on the credit side of the TB. its just copy and paste closing balance from the General Ledger Account • For more info on TB refer to your study guide 2016-02-06 UNISA E-TUTOR. The balance “brought down”(b/d) must be used to prepare the Trial Balance. • Equity (Capital).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. • Assets and Expenses accounts have Debit (Dr) balances brought down (b/d) and entered on the debit side of the Trial Balance.g. • Very easy and straight forward topic. A.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 2016-02-06 UNISA E-TUTOR. RAMASHAU FAC1502-S1-2016-GROUP 3E 12 . 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 2016-02-06 UNISA E-TUTOR. RAMASHAU FAC1502-S1-2016-GROUP 3E 13 .A.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. Statement of Financial Position • The financial position is always reflected in terms of three elements in the Basic Accounting Equation. 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) 2016-02-06 UNISA E-TUTOR.A. Assets. RAMASHAU FAC1502-S1-2016-GROUP 3E 14 . 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) 2016-02-06 UNISA E-TUTOR. RAMASHAU FAC1502-S1-2016-GROUP 3E 15 .A.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. A. You are expected to go through everything starting from Tutorial letters. You must understand the Principles. RAMASHAU FAC1502-S1-2016-GROUP 3E 16 . Study Guide and Prescribed Textbook • Are you ready for exercises!!!! 2016-02-06 UNISA E-TUTOR.Stop & Do Self assessment • Very important. this notes are not replacing the study guide. Principles and Principles! • Its time to evaluate and assess yourself • Very important. A.Napoleon Hill 2016-02-06 UNISA E-TUTOR. RAMASHAU FAC1502-S1-2016-GROUP 3E 17 .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 . TOPIC STATUS TICKBOX 1 STUDY UNIT 1 DONE a 2 STUDY UNIT 2 DONE a 3 STUDY UNIT 3 DONE a 4 STUDY UNIT 4 DONE a 5 STUDY UNIT 5 DONE a 2016-02-06 UNISA E-TUTOR. RAMASHAU FAC1502-S1-2016-GROUP 3E 18 .SELF ASSESSMENT NO.A. we must not only act. if we have the courage to pursue them.A.INSPIRATIONAL QUOTES “Road 2 Success. But in order to make dreams come into reality. the patience. and effort. you can achieve it’. it takes an awful lot of determination.Anatole France • “If you can dream it. Always remember. and the passion to reach for the stars to change the world.Jesse Owens • “A winner is a dreamer who never gives up” Tata Madiba 2016-02-06 UNISA E-TUTOR.Napoleon Hill • All our dreams can come true. dedication. not only plan. self-discipline. Walt Disney • We all have dreams. but also believe” . Harriet Tubman • A goal is a dream with a deadline . RAMASHAU FAC1502-S1-2016-GROUP 3E 19 . but also dream. Jr. • “To accomplish great things. Zig Ziglar • Every great dream begins with a dreamer. Victory and Prosperity 2016 . you have within you the strength.Starts here” • “I have a dream” Martin Luther King. YOU ARE ON TRACK!!! WELL DONE!!! KEEP IT UP!!! 2016-02-06 UNISA E-TUTOR.A. RAMASHAU FAC1502-S1-2016-GROUP 3E 20 .