# data[].attributes.body
- assume the business will have long life and last long

# data[].attributes.body
- assume that the business is separate from its owner.
- personal expenses using business resources will be taken out as drawings.
- transaction recorded in the account is limited to transaction affecting the business entity.
- contribution from the owner for business is recorded as Capital.

# data[].attributes.body
- recorded at cost of purchases or acquisition instead of current value.

# data[].attributes.body
- Financial statements are usually prepared on yearly basis.
- 1st January 2022 - 31st December 2022
- can also be prepared monthly or quaterly

# data[].attributes.body
- known as the monetary concept
- transaction expressed in terms of money
- data presented in the financial statement is in monetary value such as Ringgit Malaysia (RM)
- transaction is kept in the monetary unit rather than the physical unit

# data[].attributes.body
- revenue and its related expenses are recognize in the same reporting period

# data[].attributes.body
- revenues should be recognized when major economics activities have been completed
- sales are recognized when the goods are sold and delivered to customer or services are rendered

# data[].attributes.body
- revenues are recognized when they are earned, but not when cash is received
- expenses are recognized as they are incurred, but not when cash is paid

# data[].attributes.body
- revenues and profits are not anticipated
- only realize profits with reasonable certainty are recognized in the profits and loss accounts
- provision is made for all known expenses and losses whether the amount is known for certain or just an estimation.

# data[].attributes.body
- consistent use of accounting policy, method, and estimation techniques for the same events and transactions over a certain period of time
- to ensure comparability when comparing performances over certain period of time

# data[].attributes.body
- depend on the size and nature of the item
- small payments such as postage, stationery, and cleaning expenses should not be disclosed separately. It should be grouped as sundry expenses
- the cost of small-valued assets such as pencil sharpeners and paper clips should be written off to the profits and loss account as revenue

# data[].attributes.body
- double entry system
- each transaction is recorded with dual effect under 2 type which is Debit and Credit

# data[].attributes.body
- Information must be relevant to the purpose for which it is provided.
- For the information to be relevant to a decision, it must be involved a future event and differ among alternatives

# data[].attributes.body
- Information will be of little use if it is incomprehensible to its users
- Typical users of accounting information may also be adversely affected by the usage of technical jargon found in the information

# data[].attributes.body
- The concept of timelines means that information should be up to date as possible because old information may not be representative of present and future condition

# data[].attributes.body
- accounting information is frequently used to make comparisons
- for example financial performances of year-to-year or department-by-department comparisons
- therefore, the accounting information should be prepared consistently so that comparisons can be made

# data[].attributes.body
- financial information must be able to be proven
- verifiability means different knowledgeable and independent parties could assure that a particular event is faithful representation

# data[].attributes.body
- the financial information is neutral if:
i) there is no bias in selection or presentation of the financial information
ii) it is not manipulated to increase the probability that the information will be received good or bad by the user

# data[].attributes.body
- there are no material errors or omissions so that the financial information gives a true and fair view of the reporting entity

# data[].attributes.body
- complete information is necessary for a user to understand the events or transactions being represented
- including all necessary descriptions and explanation

# data[].attributes.body
Assets = Liabilities + Owner's Equity

# data[].attributes.body
i) Owner's Equity = ( Capital - Drawings ) + ( Revenues - Expenses )

ii) Profits (+) = Total Revenue - Total Expenses

iii) Loss (-) = Total Revenue - Total Expenses

v) Expanded Accounting Equation

Assets + Expenses + Drawing = Liabilities + Capital + Revenues

# data[].attributes.body
- Debit means receipt or received value
- Credit means given or given value

# data[].attributes.body
i) Current Assets
- properties owned by the business
a) cash & cash equivalent
b) inventory
c) ongoing project
d) pre-paid expenses
e) account receivable
f) marketable securities

ii) non-current assets
- company's long-term investment that has a useful life of more than a year
- cannot be converted into cash easily
- bought not for resale but for use in the operation of the business

a) tangible asset
- physical asset = land, bus, building, equipment

b) intangible asset
- non physical asset = pattern, trademark

c) investment
- invest fixed deposit

# data[].attributes.body
- fund supplied by external parties to the business (debt)

i) current liabilities = need to be paid within 1 year (short-term loans)

ii) non-current liabilities = don't need to repay within 1 year (long-term loan)

# data[].attributes.body
- cost operation
i) salaries
ii) rent
iii) expenses
iv) discount
v) interest expenses

# data[].attributes.body
- income represents the gross increase in owner equity
- the trading business: revenue is the total amount of income generated by the sale of good services related to the company primary operation

# data[].attributes.body
- withdrawals of assets of a business by its owner for his personal use

# data[].attributes.body
- fund supplied by the owner to the business

# data[].attributes.body
- when debit increased in assets and expenses, credit decreased in assets and expenses

- when debit decreased in assets and expenses, credit increased in assets and expenses

# data[].attributes.body
- goods brought by the business for the purpose of resale

# data[].attributes.body
- sale of goods which the business bought with the prime intention of resale

# data[].attributes.body
- goods returned to the supplier

# data[].attributes.body
- goods returned by the buyer

# data[].attributes.body
a) effect transaction = purchases expense increases
b) account = purchases account (expenses)

# data[].attributes.body
a) effect of transaction - sales revenue decrease
b) accounts - sales returns or returns inwards

# data[].attributes.body
a) effects of transaction - sales revenue increase
b) accounts - sales account

# data[].attributes.body
a) effects of transaction - purchases expenses decrease
b) accounts - purchases returns or returns outwards