HANDOUT_FARIZA ISLAMIYAH_051_PAK 20I (1)

By: Fariza Islamiyah/051

BASIC ACCOUNTING
EQUATIONS

Handout

X Grades

By: Fariza Islamiyah / 051

Basic Accounting

Equations

Name : ………………………………………………………………
Class : ………………………………………………………………
Number : ………………………………………………………………

X Grades

Fariza Islamiyah Basic Accounting Equations | Handout

BASIC ACCOUNTING
EQUATIONS

A. Competence Expected

After learning this learning material, students are able to understanding the
meaning of basic accounting equations, able to identify the types of accounts, and
able to create journals based of each transaction. This material is used for students
to get the next accounting journals.

B. Basic competence and Indicators of Achievement of Competencies

Basic Competence Indicators of Achievement of Competence

3. 6 Applying the equation 3.6.1 Elaborate the meaning of the equation the basic
basic accounting accounting

4.6 Create the equation 3.6.2 Analyze the elements of the equation the basic
basic accounting accounting

3.6.3 Elaborate the basic formula equation basic accounting
3.6.4 Elaborate the form of the equation of accounting
3.6.5 Elaborate the function of equation basic accounting
3.6.6 Elaborate the influence of financial transactions in

equation basic accounting
4.1.1 Recording of financial transactions in

equation basic accounting
4.1.2 Preparation of simple financial report of the

equation basic accounting

Fariza Islamiyah Basic Accounting Equations | Handout

C. Purpose of Learning

After read this material and do the exercise, students are able to:

1. Elaborate about the basic accounting equations
2. Elaborate about the elements of basic accounting equations
3. Analyze the basic formula of basic accounting equations
4. Analyze the form of basic accounting equations
5. Analyze the function of equation basic accounting
6. Analyze the influence of financial transaction in basic accounting equations

INSTRUCTION:

Material Accounting that is presented in the form of
handouts this is a material of the Equation Basic

Accounting. A description of the material accompanied by
case examples. Learn carefully the material and the

examples presented on the handout, so that learners can
acquire the understanding and skills. By mastering this
material, learners will be able to do the recording of the
equation basic accounting.

Fariza Islamiyah Basic Accounting Equations | Handout

BASIC ACCOUNTING EQUATIONS
SUMMARY

A. Definition of Basic Accounting Equations

Accounting is the measurement, translation, and the provision of
assurance about information that will help managers, investors, tax authorities
and decision-makers other to make resource allocation decisions within
companies, organizations, and government agencies.

The Basic Equation of Accounting is a relationship between debt, assets,
and capital of a company because every business transaction affects at least
two company accounts. The basic accounting equation equates a company's
assets with its liabilities and equity. Assets will always equal liabilities and
owner's equity. If assets increase, either liabilities or owner's equity must
increase to balance the equation. vice versa, if an Assets will always equal
liabilities and owner's equity.

B. The Elements of The Equation the Basic Accounting

1. Asset:

The asset or assets that resources are owned and controlled by a company
due to an event the transactions of the past and hopefully in the future the company
will obtain economic benefits from such sources. The following types of assets:

a. Fixed asset
is an asset Long-term used by companies to produce goods and
services. Fixed assets can be called also with assessing not lancer,
which means the asset has the benefit of more than one year and

Fariza Islamiyah Basic Accounting Equations | Handout

are recorded in the balance sheet. In addition, the assets are also
referred to as the asset is tangible or physical assets. As for an
example of fixed assets are: Land, Buildings, Equipment, Machinery,
Vehicles, etc.

b. The asset is not fixed
Is an assets expected to be converted by the company into cash
within a period of a year. Asset does not remain typically used by
companies to fund business operations daily and to pay the
operating costs of the ongoing. As for the example of the asset is not
fixed are: Cash, short-term Deposits, accounts Receivable,
securities, etc.

c. Tangible assets,
Namely the physical assets owned by the company and is usually
used to produce their products or services. Tangible assets are the
opposite of assets intangible assets that have value theory t of the
exchange rate transactional. As for the example of the physical
assets are: Land, Buildings, Machinery, Equipment, Cash, Inventory,
Marketable securities.

d. Intangible assets
Is an assets non-monetary that can be identified without the
substance of The physical. The Asset can be identified When it
appears from the contract or the legal rights of others. Assets
intangible assets are classified as indefinite or definite. As for the
example of asset intangible assets: Copyright, Patents, Trademarks,
Licenses and Permits, Intellectual property Company.

e. Asset operation
Namely the assets used in the operation of the business of the
company which is the production activities of the core. As for
example from the asset operations are: Cash, accounts Receivable,
Inventory, Equipment, etc.

Fariza Islamiyah Basic Accounting Equations | Handout

f. Assets non-operational
Assets are not required for the operation of daily business but can
still generate revenue for the business. As for the example of asset
non-operating activities is: a short-term Investment, securities,
Vacant Land, etc.

2. Liability:

Liability is a liability of the company that arises as a result of past events.
What is meant by liability here is the debt of the company. Usually, the company
goes into debt to help or run their business. Types of liabilities:

a. Liabilities Long Term liabilities that must be paid by the company
with the tempo of the one cycle financial statements of the company.
Examples of Long terms liabilities are Debts of the Bank, the Debt
Mortgages, Debt Holders of the Stock and Debt of the Lease.

b. Short Term liabilities that the obligations of the company which
payment is made less than one year such as per month or per semester.
Example short term liabilities is a Credit Account statement, Electricity Bill,
Water Bills and Income Tax.

Fariza Islamiyah Basic Accounting Equations | Handout

3. Equity

Equity or capital is the remaining interest in the assets of a company after
being deducted from paying obligations. This capital will usually be used again to
carry out operational activities in the company. Here are the types of equity,
namely:

1. Paid-in capital.
Paid-in capital is the amount of money paid by the owners or
shareholders. Paid-up capital is divided into 2 types, namely the share
capital and agio/disagio stock (additional paid-in capital).
2. Profit is not divided (retained earnings).
Profit is not shared or retained earnings balance is a collection
of profit from previous years that are not divided as dividends.
3. Capital revaluation.
Capital revaluation is the difference in value of old books with
the value of the new book.
4. Donated capital.
Donated capital is the capital that is obtained by the company to acquire
the assets of which comes from donations.

5. The capital of others. Example of capital is the capital of the backup
repayment of bonds and others that are not categorized in the four
categories above.

Fariza Islamiyah Basic Accounting Equations | Handout

4. Revenue groups, namely, rental yields and
interest.
Income is the fee charged to the
customer or consumer of goods and 5. Expenses
services rendered. Income is the
main factor of the company as a The load is a decrease in economic
measure of the progress of the benefits during the accounting period
company. As for the types of income: in the form of an outflow or depletion
of assets or the occurrence of the
a. Operating income, operating obligation which leads to a decrease
income is the result obtained directly in equity that does not involve
from the operational activities of a distribution to investors. As for the
company. Operating income return types of loads:
divided by 2 (two) groups, i.e., net
income and gross income. a. Selling expenses, is all of the
loads that appear in the selling and
b. Gross income, the income marketing of goods such as
from the original value and the sales promotional activities and the
invoice before deducting the factors transport of the goods to be sold.
of return of the goods and the pieces
on sale. b. General and administrative
expenses is the burden of a general
c. Net income, income from the nature in the company. For example,
sale of goods or services after salaries and wages.
subtracting the factor return of the
goods and the pieces on sale. c. Others expenses, is a burden
that cannot be connected directly
d. Non-operating income, non- with the main activities of the
operating income is the income that company. For example, the interest
is automatically accepted without expense.
any activity. sales. Non-operating
income is also divided into (two)

Fariza Islamiyah Basic Accounting Equations | Handout

C. Function of Equation Basic Accounting

Equation basic accounting has several functions that can be said to be important
for guidelines on corporate transactions, including:

a. The Main Source of Financial Records of The Company:

The first function is to help facilitate the company when making financial
reports. The reason, companies need to record all the transaction data that
is never done, and the table becomes the guideline calculation when
making a report later.

b. Place Of Recording Financial Transactions of The Company:

In addition, the table in the equation used to record all transactions made
by the company. For example, a purchase or sale to a particular party with
nominal for sure. Based on this data, the company will be easier to know if
occurring form of cheating finance.

c. Know The Balance Amount:

Table of equations accounting will also help the company to know how the
balance of assets, liabilities, and capital owned without the need to perform
calculations manually or find out the source of the funds. Of course, this will
be beneficial when creating financial reports because it can save more time

d. Guidelines For the Evaluation of The Company:

The last function is a helpful company to do the inspection of the related
provisions between the liabilities and the amount of assets. Because, a
calculation error will provide a significant impact on the company, especially
in the financial aspect.

Fariza Islamiyah Basic Accounting Equations | Handout

D. Formula of Equation Basic Accounting

LIABILITY EQUITY

E. The influence of Financial Transactions on the Equation Basic
Accounting

A financial transaction that occurs in a company is very influential on the
equation of accounting. Some of the possible influence of, among others:

1. Affect one, some or all of the assets, liabilities, and capital.

2. The addition or reduction of assets that may arise offset by the addition
or reduction of liabilities (in the form of debt and capital).

3. Income will always increase the capital and the load will always reduce
the capital.

Fariza Islamiyah Basic Accounting Equations | Handout

BASIC ACCOUNTING EQUATIONS
JOURNALS ANALYSIS

A. Transaction Analysis

Every transaction has journalize based on doble entry concept between the
assets, liabilities and equity. So that, you need to understand the transaction below
correctly.

a. Transaction caused change in assets and assets:
✓ Purchase an asset in cash
✓ Receive account receivables
✓ Sales assets in cash

b. Transaction caused change in assets and liability
▪ Purchase asset in credit
▪ Obtain loan from a creditor
▪ Pay business debt

c. Transaction caused change in assets and equity
➢ Investment of the owner
➢ Receive income

B. Journaling Transactions

Known to be a young entrepreneur named “Krishna” set up a business with a party
“Krishna Blue” on July 1, 2017. The company has financial position as follows:

Cash Rp 4,000,000
Fixtures Rp 1,000,000
Equipment Rp 7,000,000
Trade Payables Rp 2,000,000
Capital Rp 10,000,000

Fariza Islamiyah Basic Accounting Equations | Handout

Transactions that occur during the month of July 2017 at the “Krishna Blue” are as
follows:

July 2, Paying the rent of the Rp 1,500,000 for the six months

July 5, Received revenue service Rp 450,000

July 10, Paid the debts Rp 500,000

July 12, Buy equipment on credit amounting to Rp 2,200,000

July 15, Buy supplies Rp 800,000
Based on the above data, arrange the equations accounting “Krishna Blue” in July
2017!

Assets (Rp) Liability + Equity (Rp)
Debt Capital Information
Date Cash Fixtures Rent Equipment 2,000 10,000
7,000
1 4,000 1,000 1,500 2,000 10,000 Revenue
2 (1,500) 1,500 7,000 450 Paid debt
1,500 Buy Equipment
2,500 1,000 1,500 7,000 2,000 10,450
5 450 1,500 (500)
1,500 7,000
2,950 1,000 2,200 1,500 10,450
10 (500) 9,200 2,200
3,700 10,450
2,450 1,000 9,200
12 3,700 10,450

2,450 1,000
15 (800) 800

1,650 1,800

Fariza Islamiyah Basic Accounting Equations | Handout

BASIC ACCOUNTING EQUATIONS
EXERCISE

Instructions:
1. Read the question below carefully
2. Choose the right answer independently and correctly!

I. Answer the question below!
1. Asset is a resource owned by a company. Assets are divided into several types,
including fixed assets and fixed assets tangible and intangible assets of the
operational and non-operational. If fixed assets are assets used in the production
process, then ....

a. An example of fixed assets are land, buildings, machinery and vehicles
b. Assets can be cashed in a period of less than one year
c. Assets can't be seen and has economic value
d. An example of fixed assets are patents, copyright and rights to the brand

2. The grouping of accounts is an early stage in the accounting records. In the
recording the account is divided based on the account real account and nominal.
Below is the analysis of a real account is …

a. The account consists of an account of income and expenses
b. The account is recorded in the income statement
c. The account recorded in the statement of financial position
d. The account consists of the accounts, assets, debts and capital

Fariza Islamiyah Basic Accounting Equations | Handout

3. Mr. Roni is the leader of the company “Eco Company” engaged in the clothing
industry. Mr. Roni has a dependent Long-term debt which is mandatory settlement
within a period of more than one accounting period. One example of Long-term debt
really is …

a. Bonds and debt trade
b. Bank debt and mortgage debt
c. Mortgage debt and notes payable
d. Promissory notes and bank debt

4. Udin is a new student majoring in accounting. Udin is derived from a department
that is not in the field of accounting, then Udin must know the basic and the functions
in the accounting one of them is to understand the function of the equation the basic
accounting for the company. Function of equation accounting not as a guideline
transactions of the company are as…

a. Facilitator company in making financial records
b. A place for the recording of financial transactions
c. The place to find out the balance amount of each account
d. Place to calculate the financial statements of the company

5. PT. Back and forth to have a business which is very famous. However, because
corporate leaders lack an understanding of finance of the company, PT. Forward
Backward experiencing large losses. PT. Back and forth need a capital injection to
evoke company. Source the capital required by the CEO of PT. Back and forth to
cover the losses of the company comes from…

a. Investors
b. Employees
c. Accountant
d. The loan sharks

Fariza Islamiyah Basic Accounting Equations | Handout

6. Felicia is a businessman engaged in the field of services. In September 2020
financial data business, namely cash Rp 15,000,000, Equipment amounted to Rp
2,000,000 as well as a Capital of Rp 10,000,000. Based on the description in the listing
basis of accounting, a large debt held by businesses Felicia is…

a. Rp 3,000,000
b. Rp 5,000,000
c. Rp 7,000,000
d. Rp 6,000,000

7. “Salon Adi” open a business since 2019 and has now been running for 2 years. In
May 2020, “the Salon Adi” receive income on the services provided by Rp 2,000,000
Rp 1,200,000 of them will be paid at the end of the month. Then the journal recording
the right is....

a. Revenue Rp 2,000,000

Accounts Receivable Rp 1,200,000

Capital Rp 800,000

b. Cash Rp 2,000,000

Accounts Receivable Rp 1,200,000

Capital Rp 800,000

c. Revenue Rp 2,000,000

Capital Rp 2,000,000

d. Cash Rp 2,000,000

Capital Rp 2,000,000

8. “Beauty Salon” is a business's Susan who already have the image among the
community. In October 2020, Susan received a memorandum of cash purchases from

Fariza Islamiyah Basic Accounting Equations | Handout

the Store Adi for the purchase of equipment salon Rp 700,000. While supplies of
equipment is Rp 900,000 then....

a. Total equipment “Beauty Salon” Rp 900,000
b. Total equipment “Beauty Salon” Rp 700,000
c. Total equipment “Beauty Salon” Rp 200,000
d. Total equipment “Beauty Salon” Rp 1,600,000

9. Bu Tutik have a business of traditional food. Every end of the month he is always
paying the expenses for his efforts that Electricity Rp 150,000, water Bills amounting
to Rp 100,000 and the Cost of renting the stand of Rp 200,000. Based on that
information, then it will affect the journal of accounting, namely…

a. Cash and capital are reduced by Rp 350,000
b. Cash and capital are reduced by Rp 450,000
c. Cash is reduced by Rp 450,000
d. The capital is reduced by Rp 450,000

10. Kevin will be opening a business servicing the motor in the area of Surabaya. As
for the initial capital of Kevin is Rp 10,000,000, fixtures Rp 5,000,000 and equipment
amounted to Rp 5,000,000. In the middle of the month, Kevin bought some supplies
Rp 2,500,000 and at the end of the month equipment promising the depreciation of
Rp 200,000. From that information, the number of fixtures the property of Kevin by…

a. Rp 7,500,000
b. Rp 7,300,000
c. Rp 10,000,000
d. Rp 5,200,000

Fariza Islamiyah Basic Accounting Equations | Handout

II. Answer the question below!
1. Mr. Adam is the CEO of "Adam Air Company" that wants to recruit employees

for the position of accounting. So, he requires some specific criteria to be his
accountant. Analysis how do you think the criteria required by Mr. Adam!
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2. In the equation the basic accounting, there are accounts of assets, debt and
capital. Serina as a students get the task to identify the type of asset and
capital. Help Serina to identify the type of asset and the capital and give an
example!………………………………………………………………………………
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3. Anisa is a new student in the department of accounting. As an aspiring
accountant, Anisa should know the purpose and function of accounting. As for
the accounting functions for external parties, namely to determine the financial
cycle of a company before external parties to invest. Analysis based on Your
opinion about the accounting function for a company!
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Fariza Islamiyah Basic Accounting Equations | Handout

4. Bagas open a business in the field of print in the campus area. At the beginning
of the month, Bagas setting up Equipment and Supplies business of Rp
5,000,000 Rp 3,000,000. Bagas also receive income during the 3 days of the
results of the services of Rp 300,700. Based on that information, make a journal
of the equation the basic accounting for business Bagas!
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5. Mrs. Gigi has opened new company called “Gigi Service” which run in computer

service. This company was about 5 years now and In August 2020, “Gigi
Service” have record the transactions below:

a. Purchase of equipment Rp. 5,000,000 in cash
b. Pay off a bank loan Rp. 1,620,000 in cash
c. Pay rent of the building Rp. 700,000 cash
Make a journal of equations accounting based on the transaction above!
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Fariza Islamiyah Basic Accounting Equations | Handout

BASIC ACCOUNTING EQUATIONS

CASE-STUDY

Instructions:
1. Read the question below carefully
2. Choose the right answer independently and correctly!

In September 2019, Mark is start to run a business "Mark Service" but he does
not know about records required for the company. Help Deny to make a record for the
transactions and analyze it balance or not! Here are the transactions:

01 Deny entered the initial capital in cash of Rp 500,000 and equipment
Rp 80,000 as the company's initial capital.

03 Purchased equipment on credit Rp 300,000
05 Pay rent Rp 10,000 and other costs Rp 5,000
10 Paid debt obligations to creditors Rp 50,000
16 Receiving service income in cash Rp 30,000
19 Deny took cash for personal use of Rp 5,000
20 Completed by order of a customer and the honorarium received in the next

10 days is Rp 170,000
23 Received per debtor's cash Rp 50,000
25 Received per cash interest income of Rp 3,000
28 Paying employee salaries Rp 10,000
30 After adding up the remaining equipment Rp 76,000

Fariza Islamiyah Basic Accounting Equations | Handout

Needed:

A. Make the journal of basic accounting equations!
B. Analyze the conclusion based of the journal above!

ANSWER SHEET

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Fariza Islamiyah Basic Accounting Equations | Handout

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Fariza Islamiyah Basic Accounting Equations | Handout

REFERENCE

1. Persamaan Akuntansi: Fungsi dan Rumusnya - Akseleran Blog
2. Persamaan Dasar Akuntansi - Contoh, Rumus, Konsep, Unsur - Unsur
3. Contoh Soal Persamaan Dasar Akuntansi - Transaksi dan Jawabannya

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Fariza Islamiyah Basic Accounting Equations | Handout