In the previous lecture we saw the General
Journal and the General Ledger and also looked at how the transaction entries are
made in both the book of accounts. Please note here that nowadays many companies
record their transactions electronically, using a computer and some software, but remember
that the basics remain same, they don't change. In this lecture we will continue to look at
some more transactions and also see how the accounting equation maintains its balance? By now
you must have memorized the accounting equation" Assets Equals Liabilities plus Equity, here we
are going to look at some of the transactions, and see how they impact the accounting equation.
As you can see we have Assets on the left side then we have Liabilities and the Equity on
the right side, and then we have also divided the assets into the different types of assets,
these are just some examples, you know that there are many different types of assets, tangible
and intangible assets, but here we are just looking at cash supplies and equipment under
the assets, then under liabilities, we have two different types of liabilities mentioned here,
accounts payable and notes payable, you can have more liabilities and under equity we have owners
capital, owners withdrawals, revenues and expenses….