Professional Documents
Culture Documents
MANAC Session 2
MANAC Session 2
July 2021
BMJ Term 1
Tuesday
(6 - 7pm)
[email protected]
Key Terms: Assets
• Assets: resources
• Classification:
Current Assets
Non-current Assets
Basu, XLRI
Key Terms: Liabilities
• Liabilities: obligations
• Classification:
Current Liabilities
Non-current Liabilities
Basu, XLRI
Key Terms: Equity
• Residual interest in assets post liabilities
Equity =
Share Capital + Revenues –
• What a company OWES (to owners)! Expenses – Dividends/Drawings
• Components:
Net profit =
Share capital – contribution by owners Revenues – Expenses
Revenues – amounts charged to customers
Retained Earnings =
Expenses – costs of earning revenue Net profit – Dividends/Drawings
Dividends / Drawings – distribution of profits to owners
Basu, XLRI
The Accounting Equation
Economic Resources = Claims
Basu, XLRI
Test!
• Assets = 70,000; Liabilities = 48,000; Equity = ? Equity = Assets – Liabilities = 22,000
Basu, XLRI
Analysing Business Transactions
• Owner invests 50,000 on 15th May 2020
• Services worth 15,000 provided for cash on 30th May 2020; agreed on further services of 12,000
Basu, XLRI
Date Assets Liabilities Equity
Supplies +18,000
25th May No effect No effect
Cash -18,000
• Balance Sheet
Basu, XLRI
Basu, XLRI
Basu, XLRI
Basu, XLRI
Basu, XLRI
Test!
• ABC Ltd details:
Assets Liabilities
Beginning of the Year 3,60,000 1,37,500
End of the Year 5,80,000 3,03,000
• 2.4
• 2.8
• 2.11
• 2.12
• BDC 2.2
Basu, XLRI
The rest…
in a while,
Questions for Next Class
3.4
Basu, XLRI