Double Entry Extended - Urdu/Hindi - Get Ahead in Cambridge Accounting 7707 / 9706 with Easy Tips

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1 Financial Accounting
1.1 The accounting cycle
 explain & apply the principles of the double entry system to record business transactions
- Accounting system: a system of collecting, storing & processing financial information & accounting data used by managers.
- Double-entry bookkeeping: a system of recording accounting transactions that recognises that there are two sides / aspects to every transaction.
• All transactions have a dual aspect.
• Every debit entry in an acc. in the ledger must have a corresponding credit entry.
• Every credit entry in an acc. in the ledger must have a corresponding debit entry.
 apply the accounting equation
- Assets = 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 + 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
- Assets: something which is owned by / owed to a business
- Capital: initially the amount of money invested in the business by the owner. After the first trading period, it is adjusted by the profit for the year less any drawings plus any additional capital contributed. It is the net amount which the business owes to the owner
- Liabilities – the amount of money owing to people outside the business for the use of their resources