Accounting consists of three basic activities—it identifies, records, and communicates the economic events of an organization to interested users.

Internal Users

who plan, organize, and run the business.

-          Finance

-          Marketing

-          Human

-          Resources

-          Management

External Users

who want financial information about the company

-          Investors

-          Creditors


Accounting Standards


International Accounting Standards Board (IASB)

-          Digunakan di INGGRIS, EROPA


Financial Accounting Standards Board (FASB)

-          Digunakan di : AMERIKA


Measurement Principles

HISTORICAL COST PRINCIPLE (or cost principle) dictates that companies record assets at their cost.

Misal : Harga baru mobil (beli pada saat itu)

FAIR VALUE PRINCIPLE states that assets and liabilities should be reported at fair value (the price received to sell an asset or settle a liability).

Misal : Nilai harga mobil pada saat itu (lihat harga pasar) biasanya bekas



MONETARY UNIT ASSUMPTION requires that companies include in the accounting records only transaction data that can be expressed in terms of money.

Misal : semua benda, orang, hewan yang bisa dijadikan bentuk satuan uang

ECONOMIC ENTITY ASSUMPTION requires that activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities.

Misal : Transaksi dipisahkan antara perusahaan dan orang


Forms of Business Ownership


-          Owned by one person

-          Owner is often manager/operator

-          Owner receives any profits, suffers any losses, and is personally liable for all debts


-          Owned by two or more persons

-          Often retail and service-type businesses

-          Generally unlimited personal liability

-          Partnership agreement


-          Ownership divided into shares

-          Separate izin entity organized under corporation law

-          Limited liability


Basic Accounting Equation

-          Provides the underlying framework for recording and summarizing economic events.

-          Assets must equal the sum of liabilities and equity.

Assets = Liabilites + Equity


-          Resources a business owns.

-          Provide future services or benefits.

-          Cash, Inventory, Equipment, etc.



-          Creditors (party to whom money is owed).

-          Accounts Payable (membeli barang dilunasi cepat), Notes Payable (Utang dibuat dengan perjanjian), Salaries (utang kepada Kariawan ex:membayar gaji kariawan) and Wages Payable, etc.


-          Ownership claim on total assets.

-          Referred to as residual equity.

-          Capital and Revenue. (hanya ada di korporasi)


Stockholders’ Equity

Revenues business activities entered into for the purpose of earning income. revenue are: sales, fees, services, komisi, interest, dividends, royalties, rent.

Expenses cost of assets consumed or services used in the process of earning revenue. Expenses are: salaries expense, rent expense, utilities expense, property tax expense, etc.

Dividends distribution of cash or other assets to shareholders. Dividends reduce retained earnings. However, dividends are not expenses.


The Basic Accounting Equation

-          May be external or internal.

-          Not all activities represent transactions.

-          Each transaction has a dual effect on the accounting equation.


Transaction Analysis

TRANSACTION 1. INVESTMENT BY STOCKHOLDERS  Ray and bob decide to start a smartphone app development company that they incorporate as Softbyte SA. On September 1, 2017, they invest €15,000 cash in the business in exchange for €15,000 of ordinary shares. The ordinary shares indicates the ownership interest that the Neals have in Softbyte SA. This transaction results in an equal increase in both assets and equity.

TRANSACTION 2. PURCHASE OF EQUIPMENT FOR CASH  membeli computer for €7,000 cash.

TRANSACTION 3. PURCHASE OF SUPPLIES ON CREDIT  purchases for €1,600 headsets and other accessories expected to last several months. The supplier allows Softbyte to pay this bill in October.

TRANSACTION 4. SERVICES PERFORMED FOR CASH  receives €1,200 cash from customers for app development services it has performed.

TRANSACTION 5. PURCHASE OF ADVERTISING ON CREDIT  receives a bill for €250 from the Programming News for advertising on its website but postpones payment until a later date.

TRANSACTION 6. SERVICES PROVIDED FOR CASH AND CREDIT. provides €3,500 of services. The company receives cash of €1,500 from customers, and it bills the balance of €2,000 on account.

TRANSACTION 7. PAYMENT OF EXPENSES  pays the following expenses in cash for September: office rent €600, salaries and wages of employees €900, and utilities €200.

TRANSACTION 8. PAYMENT OF ACCOUNTS PAYABLE  pays its €250 Programming News bill in cash. The company previously (in Transaction 5) recorded the bill as an increase in Accounts Payable.

TRANSACTION 9. RECEIPT OF CASH ON ACCOUNT  receives €600 in cash from customers who had been billed for services (in Transaction 6).

TRANSACTION 10. DIVIDENDS  PT pays a dividend of €1,300 in cash to Ray and Barbara Neal, the shareholders of Softbyte SA.

Summary of Transactions

1.      Each transaction must be analisis its effect on:

-          tiga komponen of the basic accounting.

-          Specific types of items each component.

2.      Two sides of the equation must always be equal.

3.      The Share Capital—Ordinary and Retained Earnings columns indicate the causes of each change in the shareholders’ claim on assets.

The Basic Accounting Equation

Financial statements :

-          Income Statement

-          Retained Earnings Statement

-          Statement of Financial Position

Income Statement

-          Reports the profitability of the company’s operations over a specific period of time.

-          Lists revenues first, followed by expenses.

-          Shows net income (or net loss).

Statement Of Owner’s Equity

-          Reports changes revenue in specific period time.

-          time period is the same as that covered by the income statement.

-          Information provided menunjukkan alasan revenue naik or turun during the period.

Statement of Financial Position

-          Reports assets, liabilities, equity in specific date.

-          Assets at top, followed by liabilities and equity.

-          Total asset must equal total liabilities and equity.

-          Is a snapshot of the company’s financial condition at specific moment in time (biasanya akhir bulan atau akhir tahun).



mencatat of increases and decreases in a specific asset, liability, stockholders equity, revenue, or expense item.


-          setiap transaksi harus mempengaruhi dua atau lebih

-          equation in balance (Debit = Credit).

-          Recording debiting at least one account and crediting at least one other account.

T Account

If sum of Debit entries are greater than the sum of Credit entries, the account will have a debit balance.





If sum of Credit entries are greater than the sum of Debit entries, the account will have a credit balance.





Info : Normal balance is on the increase side.


Assets - Debits should exceed credits.

Liabilities – Credits should exceed debits.

Capital and revenues increase equity (credit).

Dividends and expenses decrease equity (debit).

Purpose of earning revenues is benefit shareholders.

Expenses opposite effect: expenses decrease equity.

Relationship among the assets, liabilities, and equity of a business

Total Debits harus sama dengan Credits.

Business documents, such as a sales receipt, a check, or a bill, provide evidence of the transaction.

The Journal

-          Book of original entry.

-          Transactions recorded in chronological order.

-          Contributions to the recording process:

-          Discloses the complete effects of a transaction.

-          Provides a chronological record of transactions.

-          Helps to prevent or locate errors because the debit and credit amounts can be easily compared.

LO 2

JOURNALIZING - Entering transaction data in the journal.

ex: On September 1, shareholders invested €15,000 cash in the corporation in exchange for ordinary shares, and Softbyte purchased computer equipment for €7,000 cash.


ex:  On July 1, Reyhan Company membeli a delivery truck costing $420,000. It pays $240,000 cash now and agrees to pay the remaining $180,000 on account.

General Ledger contains all the asset, liability, and equity accounts.



Transferring journal entries to the ledger accounts.

A trial balance

-          list of accounts and their balances at given time.

-          proves the mathematical equality of debits and credits after posting.

The steps for preparing a trial balance

1.      List the account titles and their balances.

2.      Total the debit and credit columns.

3.      Prove the equality of the two columns.

Trial balance may balance even when

-          A transaction is not journalized.

-          A correct journal entry is not posted.

-          A journal entry is posted twice.

-          Incorrect accounts are used in journalizing or posting.

-          Offsetting errors are made in recording the amount of a transaction.