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1.2 Accounting Equation
1.2 Accounting Equation
2 Accounting Equation
● To define assets, liabilities and
owner’s equity
● To apply the accounting equation
Success criteria:
And this is also the resources of monetary value that a business owns.
This is assets.
The story doesn’t stop here…...
There are other people than owner supply resources to the business.
This is liabilities
This is the amounts that the business owes people that supply the resources.
Owner’s
Assets Liabilities
equity
ACCOUNTING EQUATION
Key terms to learn
● Textbook page 9
Solidify
Now, tell the story again to your friend
Classify them
Matching game
Cash in hand
Motor Vehicle
Office equipment
And finally the end of the story is…...
Owner’s
Assets Liabilities
equity
ACCOUNTING EQUATION
Solidify - Accounting Equation
● Textbook page 10, Activity 1
Non-current asset
Current asset
Non-current liabilities
Non-current asset
Current liabilities
Non-current asset
Current asset
Current liabilities
Current asset
Double entry system
Example
Anita Goswell decided to start a busines.
Her accounting equation will be:
Assets = Liabilities + Owner’s equity
0=0+0
Solidify
Practice 1.2.1 & 1.2.2