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Submitted By yasinsindhu
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Chapter 1 – A way of viewing business
Key Concepts
Recording of a firms transactions are important. I was amazed how the concept of cut and paste is similar to the double entry accounting concept. Double-entry accounting is to minimise the mistakes used in accounting, it is similar to trace where the mistakes happen. I guess this is why accountants use it.
Each and every accounting transaction has its effect on the accounting equating. Every transaction modifies the apparatuses present in the accounting equation which is Equity = Assets – Liabilities, is satisfied after every alteration.
In Chapter 1, I noticed its emphases on the five elements of accounting, which is Assets, Liabilities, Equity, Revenues and Expenses,
Questions:
1. Do firm’s accounting statements show the true picture of the firm’s economic and business reality? 2. It was informed in Chapter 1, that organisations constantly create and exchange values with other firms. 3. How do organisations create value rather than destroying its values. 4. Does it necessary to have an partnership agreement between the partners ? 5. How does partnership organisations distribute its profits amongst the partners ?

Chapter 3 – Introducing financial statements
Key Concepts
I was amazed how the concept of balance sheet is used and as there is no specific rules in how a firm set out their financial statements.
In Chapter 3, I noticed its emphases on the four general purpose financial statements.
Balance sheet
Income statement
Statement of changes in equity
Cash flow statements

A firm’s balance date could be any date and the date varies from company to company.
Revenue – Expenses is equal to firm’s income for a period. This is known as the‘bottom line’ of the company.
I also found that statement of changes in equity shows a various change in shareholders equity over a

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