1. Introduction to Accounting Book keeping Accounting This is a process of detailed recording of all the financial transaction of a business. Each financial event or business activity is called a transaction This uses the bookkeeping records to prepare the financial statements at the regular intervals.

2. Learning objective Accounting literacy Financial literacy Business literacy

3. The three aspect of Accounting STRUCTURE LANGUAGE MOVEMENT Terminology ie assets, liability, income Increase or decrease and debit & credit Ledgers, Income statement and balance sheet

4. The five absolute elements in accounts Assets Liabilities Expenses Owner/capital Income

5. Definition of terms Assets: are resources that are owned by a business and uses them to run the business to produce, sell goods and services eg Machinery Motor vehicles, cash etc Expenses: These are day to day running costs incurred by a business in the process of earning revenue eg rent, wages, salaries, interest, costs of heat etc Liabilities : these are amounts that the business owes to other people eg amount owed to suppliers, loan, bank overdraft etc Capital : This represent resources invested in the business by the owner or money used to start up the business by the owner. Income / Revenue: These are the amounts the business earns by selling its products or providing services to customers. eg sales, fees, commission, interest, rent received, etc.

6. The Butterfly concept Green Yellow The earth consumption of energy The sun, the source of energy

7. The accounting duality/butterfly. Green yellow Use of funding Source of funding 3.Assets 5.Expenses 2. Liabilities 1. Owner/equity/capital 4. Income

8. Accounting duality continues Green Yellow Use of funds Room 3. Assets Premises Machinery Motor vehicle Equipment Stock Fixtures and fittings Room 5. Expenses Wages and salaries Insurances Rent electricity Source of funds Room 2. Liabilities Creditors Loan Room 1. Capital /Equity Room 4. Income Sales Rent received Commission received

9. Conclusions It is a Trial balance Green debit, yellow credit Room 1,2,3 is the accounting equation which states that: ASSETS= CAPITAL + LIABILITY Therefore room 1,2,3 is a balance sheet Room 4,5 is an income statement. Rooms 1,2 and 4 credit increase and debit decrease Rooms 3,5 credit decrease and debit increase

10. Terminology: Debits & Credits Green use of funds Yellow: Source of funds Debit Debit the account increases Credit the account decrease Credit Credit the account increase Debit the account decrease