Oromia state University

Department of Accounting and Public Finance

Principle of accounting I assignment GODM

Provide your Answer for below questions referring materials related.

Part One 1% each
1. Accounting is often called the “language of business”. Explain why it is.
2. Accounting system is used within the organization for a variety of purposes.
Explain these purposes
3. List and explain who Users of accounting information
4. Explain the similarity and difference among Income statement, balance sheet and
owner’s equity statement.
5. Using of four column account form is advisable than using two column account
due to its advantage. What are these advantages?
6. Explain the similarity and difference between general journal and special journal.
7. The relationship among the accounting elements can be expressed in a single
mathematical form known as the basic accounting equation. based on this
sentence
I. Define what is basic accounting equation
II. List and explain The Elements of Accounting
Part Two. Define the following terms by providing example 1% each
i. Business Transactions
ii. Internal Business transaction:
iii. External Business transaction
iv. Financial Statements
v. Time Period (Periodicity) concept
vi. Journal
vii. Ledger
viii. Chart of Accounts
ix. Double entry Accounting
x. Trial Balance

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 Oromia state University
Department of Accounting and Public Finance
Principle of accounting I assignment GODM
Part three work out (3%)
1.Depending on the nature of account affected debit or credit may be either decrease
or increase which is guided by the rule of debit and credit. Based on this concept fill
the blanks by showing increase or decrease using + or - sign and write its normal
balance at its appropriate column.

Account Debit Credit Normal Balance

Any Asset

Any Liability

Owner’s equity (Capital)

Any Revenue

Any Expense

Owner’s drawing

8.

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