Business transactions exchange of values, bet.

Two parties or at least two parties,

in terms of money
Eov- equal value parted with, dual effect of a bus. Transaction, double entry
bookkeeping
Three elements of finl position- a,l,oe
2 finl performance- income and expense
Assets- resource obtained from past event, control over it, future economic benefits
will be received from its use
Liabilities- present obligation, arose from a past event, settlement is expected to be
made in the future in the form of an outflow of resources.
Equity- residual right or interest of owners, net assets or net worth
Partnership- partners equity
Corpo- shareholders equity
A= L+E
Assets= from creditors or owners investment
Expanded
A= L+I+R-E-W
Account- device used to record the changes in acctg elements
Assets- cash, ar, nr, inv, supplies, land, furniture
Liab- usually payable, ap, np, lp, mp
Oe- oc, od

EXAMPLE
June 2
June 3
June 5
June 7
June 9

The owner, Mr. A, invested cash of P65,000 in

establishing a barber shop.
A barber chair amounting to P3,500 was bought for cash
from Quality Store.
Bottles of lotion and powder were bought from Fragrant
store for P2,000.
The business rendered service to customers for cash, P
1,500.
The business rendered services to Skyhigh Company for
P5,000 for which cash of P3,000 was received, balance
of P2,000 on account.
ASSETS

LIABILITIE
S

OWNERS EQUITY

Date

March 1
March 3
March 7
March 15
March 18
March 20

Mr. A opened a tour and travel service by investing

cash of P50,000. She has three cars but decided to
invest only two cars costing P750,000.
Gomez borrowed P100,000 cash from Metrobank for use in
her business.
Bought tables and chairs from Blims and paid cash,
P45,000.
Various equipment were purchased on account from
National Winners for P55,000.
Gomez made a cash withdrawal of P5,000 for personal
use.
The account due to National Winners was paid in cash.
ASSETS

Date

LIABILITIES

OWNERS
EQUITY