Accounting Foundations

What accounting is and who uses it

Explain what accounting measures and match users of financial information to the decisions they make.

Classification · Concept checks · Sequencing · Conceptual Framework ch. 1

The accounting equation

Apply assets = liabilities + equity to show how any transaction keeps the equation in balance.

Worksheets · Calculations · Equation analysis · Simulator · Conceptual Framework ch. 4

Transactions and economic events

Decide which events are recorded in the accounts and which are not, and why.

Calculations · Classification · Concept checks · Equation analysis

Accrual versus cash accounting

Measure profit on an accrual basis and explain why it differs from cash received and paid.

Worksheets · Calculations · Classification · Concept checks · Conceptual Framework 1.17, IAS 1

Debits and credits

Use the debit and credit rules to record increases and decreases in each type of account.

Journal entries · Calculations · Classification · Concept checks · Simulator

Account types and normal balances

Classify accounts into the five elements and state each account's normal balance, including contra accounts.

Worksheets · Calculations · Classification · Concept checks

The chart of accounts

Read a chart of accounts, use its numbering, and choose the right account for a transaction.

Journal entries · Classification · Concept checks

Your first journal entries

Record common business transactions as balanced journal entries.

Journal entries · Concept checks

Source documents

Identify the document behind a transaction and record the entry it supports.

Journal entries · Classification · Concept checks · Sequencing

Ethics in accounting

Recognise threats to objectivity and integrity in everyday accounting situations and the appropriate response.

Calculations · Classification · Concept checks · Sequencing · IESBA Code (fundamental principles)

The accounting cycle

Order the steps of the accounting cycle and explain what each step produces.

Calculations · Classification · Concept checks · Sequencing · Simulator