Make a Receipt for Accounting with Ease

Make a receipt for Accounting

[Music] good day great eight and welcome to two minute teaching you are tuned into your second grade eight ems financial literacy lesson for term two in this lesson we'll take some time to understand the accounting equation so are you ready and you know the beat let's get down let's get down to business in term one we dealt briefly with the accounting equation so let's see how we will apply it practically so great eight in accounting we can show every transaction as a simple equation and remember in accounting there's always a positive amount so the counting equation is assets equals onus equity plus liabilities the three elements of the accounting equation must always remain in balance so remember grid eights the three elements assets owners equity and liabilities of the accounting equation must always remain in balance in grade eight we are only going to focus on two elements of the accounting equation assets and owner's equity but in grade 9 we are going to cover liabilities so grade 8 in order to work with the accounting equation you need to know what an asset is and what an owner's equity is so let's have a look at the following table to identify what an asset is and what owner's equities are so tip the following table is very important and something that you need to learn by heart the following tips will also help you understand the accounting equation a bit more when you look at the effect of a transaction of assets and owners equity you must see it from a business point of view so after reading through transaction ask yourself what happened remember a transaction is an action or an event that takes place in a business great you should also remember a service business is when you offer a service in exchange for a payment for example wedding planners caterers hairdressers plumbers and electricians okay so let's get practical we'll be using a business that you covered in term one bake at brenda to explain the accounting equation do you remember brenda she opened up her own bakery but if you forgot you're human but you can go back to term one's lesson let's look at a few examples of the effects of transactions on the accounting equation this will include capital contribution services rendered and rent income transaction one capital contribution so great eight i'm going to give you an example but before i get there i want you to identify the key or relevant accounting information that will influence a transaction so let's look at this brenda started her own business a bakery by depositing a capital contribution of one hundred thousand rand receipt number zero one was issued let's look at the key or relevant accounting concepts that will influence the transaction within the scenario the word capital contribution came into play and also receipt but what is that grade 8 when we talk about the capital contribution we talk about money that the owner supplies but receipts refers to the amount of money that a business receives and the deposit in a current bank account great eight remember to always distinguish between the owner and the business the owner and the business are separate entities so to sum it up the asset cash increased by a hundred thousand rand and the owner's contribution gives the owner interest in the business called owner's equity the owner's equity will increase by a 100 000 rand you should always test if a transaction is filled in correctly remember we are looking at two components within the accounting equation assets equals owner's equity therefore the hundred thousand grand representing the assets equals the hundred thousand grand representing the owner's equity thus the equation is correct remember that brenda contributed a hundred thousand round towards her business this is an asset because cash increase and it also increases owners equity let's look at the effect of the capital contribution in the following table you will see that the table is divided into two on one side we have the assets and the other side we have the owner's equity the effect on the asset side is a plus a hundred thousand and the reason for that is cash increases and because the cash increases on the asset side the effect on the owner's equity will also be a plus and the reason for that will be owner's capital contribution transaction 2 services rendered so let's look how does service rendered influence the asset and owner's equity within a business a business received 33 000 rand for service rendered and this was recorded on a cash register role remember you need to identify the relevant or key aspects within the sentence or transaction to see how the transaction influence the account received what is that it's an amount of money that a business receives and deposits in the current bank account and the cash register role that is income because of service delivered a service business offers a service to a client and then receives money in return which is an income for the business the asset cash increases by 33 000 no asset decreases so the total assets increases by 33 000 rent receipts that have the effect of increasing on the owner's equity are called income in this case a service was rendered to a client and in return the business received money which is an income for the business thus the equation is correct so let's look at the effect of the transaction on the account of the business similar to the previous example a table divided into two on the one side we have the assets and the other side we have the owner's equity on the asset side the effect is a 33 000 rand plus reason for that is cash increases on the right hand side we have the onus equity and the effect of that is also a 33 000 plus the reason for that is income was earned so the third transaction grade 8 we will be looking at rent income and again when i'm going to read the scenario to you or the statement i want you to identify the relevant or key aspects of the transaction to determine the influence it will have on the account bank at brenda received 15 000 rank from jaime loy for the rent of offices in the building receipt number issued is number zero two remember i have asked you to identify the words that will help indicate the accounts that is applicable so what are those words receipt and receive that refers to an amount of money that a business receives and deposits into the current bank account rent which is also seen as income and credit eight this is when businesses are renting out their premises and receive or earns money for renting the premises and therefore it is called rent income so let's look at how do we record this into the accounting equation table the asset cash increases by 15 000 rent no asset decreases so the total assets increases by 15 000 round receipts that have the effect of increasing owners equity are called income in this case the relevant income is rent income thus the equation is correct so let's look at the equation table remember it's divided into two columns on the one side we have the acids and the effect here is that there's a 15 000 rand plus y and the reason for that is cash increases on the other side we have the owner's equity and the effect of that grade 8 is 15 000 grand plus and the reason for that is rent income ready this marks the end of another lesson on financial literacy see you next time when we will discuss and learn about the cash receipt journal i hope you enjoyed this lesson these lessons are very costly for us to produce but we are very determined to keep it free for everyone we produce these lessons at the rate at which it gets funded so here are three ways to join hands with us to keep it free for all south african learners first off share our resources so that more people can benefit secondly you can add us on my school as a beneficiary this will help us immensely thirdly we give section 18a certificates so your contribution will have a tax benefit so let's join hands and collaborate for free quality education for all 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