Machado Canton and Aston Villa this training program to people with accounting and accounting is one of the subjects that you need to understand therefore this Levin understand it, I will help you with the basic principles and indeed you can apply it to your studies or in the workplace. Now I'm an Afrikaans speaking guy, so all the ease and as we've always been pleased with our trauma base, first of all, we need to have a look and see what accounting is. accounting is normal mess, is just that we put it in a different format. Now let's look at an example. If I buy something for 40 grand and I go and sell it, for 70 rain, then I made a profit on city rain and then Quite easy, I bought something for 40 rent or sold it for 70 ran. And now I have 30 rent in my hand.

Now let's look at the accounting side of it. First of all, we love sales 70 rent, cost of sales for tearing, and thank city. Now I know that sales and cost of sales or income statement items and I have a 70 credit 40 debit. So 72 plus 40 debit will leave me with city credit. That's the profit that I made. And I know that bank is a balance sheet item and the city debit thing is a Sivir and then I have in my end of the transaction.

Now accounting is based on the double entry system. We can say that 100 equals and and 100 equals 90 plus thing and 70 plus 50 equals 80 plus 20. And if I draw a line down the middle from the top to the bottom, and I do that, then this will be one debit side that will be non credit side. And Africans who spell credit with a k, d is before k in the alphabet and we read from the left to the right so the left will always be more debit side. I can see I have like 100 debit, and 100 credit 100 debit and 90 a stain that's 100 credit 70 per city, debit and it was 20 credit. For every transaction, there will be at least one debit and one credit It might be the dish, one debit, but two credits, but the debits will equal the credits.

And if I add up my debits, I'll get 300. And if I add up my credits for total 300, and you can see 300 equals 300. And that is when the system is in balance. If we take away this idea of elegance to it, and then you can see 300 is not equal to do it, and the system will not be in balance. So our system always needs to be in balance. And in the question window and the window I created, that accounting is only five types of accounts.

There's only four, not six, not seven, not eight, only for assets. liabilities, equity, income and expenses. That's the five types of accounts assets, liabilities, equity, income and expenses. You need to know them and you need to know when they become more or less assets will become on the debit side they certainly credit side liabilities will become on the credit side lists on the debit side. Equity will become on the credit side list on the debit side. Income moving from on the credit side list on the debit side and expenses will become more on the debit side less on the credit side.

Now you need to know this boiler and then you can see it it's only assets and expenses. says that will become more on the debit side. Let's look at the theory, assets. assets have both an intention to generate income over the lifespan of an asset. So we're going to buy an asset. And we're going to use this asset to generate income liabilities.

Liabilities are data that was raised to purchase assets or expenses that will be settled later on. So I'm going to buy something and I'm only going to pay for it tonight on equity. Equity consists of two elements, capital reserves, capital funds that is contribute towards their company. So they're going to contribute capital towards the company to start the company. income. income is a transaction that is conducted between entities resulting income flowing into their company.

So income is a transaction that will generate money expenses, expenses are transactions initiated to generate income expenses have a Doric link to income. Now we will deal with this in the business module. Then we know that these are the five types of accounts and we can divide them into two categories. Now, it's very important that you know, that this balance sheet items and income statement items or balance sheet items, or assets, liabilities and equity and income statements, items or income and expenses, and income these expenses will give us a profit or loss. So you need to know that these five types of accounts You can divide them into two categories, balance sheet items and income statement items, balance sheet items, assets, liabilities and equity, income statement items, income and expenses. Now let's have a look at this business model after solder, but I'm going to start a business.

Now open a bank account and I deposit 100 grand into the bank that is capital like contribute towards this business that is equity. And after decided that, I'm going to deliver newspapers. And I can reach these three houses and I have to go and buy newspapers now the newspapers cost me three grand on both three newspapers for nine rain. And I walk in I go and deliver him to as long as to announce three and I sold them for Hiring so far rent on three equals 15. And I made a profit of 6000. Now the sales will be income.

And the purchases will be expenses. So classified sales as income. And I classify purchases and expenses. But there's opportunity here. If I can reach those three houses, then I can expand my business. But I need a bicycle.

It's too far too. So I'm going to buy this bicycle. But then the money for this bicycle is 500. So I go to the bank and asked the bank manager to please help me. He said, no problem. I'll give you the 500 train, but how are you going to repay me?

He says, Well, the only way that I can repay you is I will buy you. dinner and then Now I have a loan, I have a loan that I need to repay, and that's a liability. So that's a liability, the loan is a liability. But now I have a bicycle. And now I can deliver to you as long as 2345 and six, and I delivered six newspapers. So my income will be 13,500 to buy six newspapers that was 18 grand, and now my profit is 12.

Now you can see that are generated more income, so I use this bicycle to generate more income, city rents and this bicycle will be an asset. So now we know that capital is equity, sales, income, the purchases or expenses. My loan is a liability because I need to create By the bank 10 grand per month and my bicycle isn't acid or use it acid to expand my business. Now income statement items first of all we have income and then expenses income, we just saw that sales is income and then I can have rent received. So if I have a building and someone wants to utilize it, I can do it but they need to pay me rent. So I use my asset the building to generate income and then this interest received.

If I have a lot of money, I go to the bank manager and asked him if I can invest it and then he will pay me interest. The interest is in income so I generated income on my investment. Then you can add something like consulting fees people consult me with a tax problems and I use my knowledge to assist him. So I sell my knowledge to them. So my knowledge will generate income consulting fees. And then we have expenses.

We have cost of sales, or those purchases. So I bought the newspapers with intention to sell them and I price when I bought him that was an expense. And then I can have rent, right? So if I don't have a building, and I need a premises to start of my business, I go to someone asked him if I can use the devoting his building and he says that probably you can use it, and you're gonna buy me ring. So I buy the ring. And then I move into the building and I start my business.

And now I'm going to generate income in interest, right. So I went to the bank manager now asked him to please help me with 500 grand but I need to read By 600 train Now the difference between the five and the 600 train is 100 grand. That's interesting enough by it by the interest to be able to get the bicycle to generate income, so the interest is an expense and then these bank charges my business needs a bank account, otherwise I can't operate. But to have a bank account will cost me money the bank will charge me some bank charges. So every month it will be a bank charge and that is for the bank accounts. And then those bank charges on earnings and expense.

Balance Sheet items will have fixed assets. That is a motor vehicles and building it's all the assets that I have to generate income and then I can have digitus people can bond from me but that Don't pay me. And they will only pay me at a later stage. until they find me they are the data. So they still owe the money to me, then I can have stock. That's my merchandise in the store.

Now, stock is an asset because I can go and sell it in your in the future and then that will generate income and a positive bank account. So I can go and invest that money and then I can generate income, I will receive green interest on it. Then we have liabilities. That loan was a liability. Then creditors, so if I buy from people and I don't buy them, that all my creditors so I will only buy them at a later stage in a vat value added tax. That's a tax that I collect on behalf of the government and I have a responsibility to Find it.

Everything. So that's a liability. And then a bank overdrawn. So when my bank is in a minus means that I owe the bank some money, that's a liability because I still need to buy them. And then I've equity can be Shay's. Oh, capital.

So when I started the business, I paid 100 grand into the bank account. And that's my contribution to start up this business. So it's equity. And then I have reserves. reserves, is all my profits that are made through all the years. Now let's look at a few examples how we account for assets, liabilities, equity, income and expenses.

First of all assets, assets become more by debiting the account unless by crediting the account in this example, Purchase a vehicle check for 13,000. Now first of all this transaction will have a debit and a credit sign, please one debit and at least one credit. First of all, I bought a vehicles and motor vehicles. Material vehicle is an asset. And when I bought the vehicle now I have a vehicle I didn't have one before but now I have one. So my assets become more assets, assets.

Plus, when an asset becomes more we need to debit it. David think the checks are paid for the check. Now when the check will go through the bank then my balance will reduce. So we'll add bank bank is an asset. As it will become less more balance will reduce When an asset becomes lists, we created created things and all I need to do now is copy and paste, motor vehicles, debit 10,000 bank credit 10,000. And if the debits things thousand, add up the credits 10,000 in system is in balance and then purchase a vehicle on credit for 15 cents or so I bought the vehicle but I haven't paid for it and only going to buy for a later stage.

So first of all I marry vehicles, that's assets as assets become more plus if an asset becomes more, we need to debit it 15,008 Then on credit created as a creditor, so I still need to buy for it. liability liability becomes more plus created. So it's a liability plus credit 15,000. And now I need to copy and paste Mehta vehicles. David 15,000 liabilities created 15,000 and up to do David's 15,000 add up the credits 15,000 Rand, Sr ism balance. And then how do we account for a liability?

Liabilities become more by being credited and less by debiting the account so 10,000 borrowed from the bank and buy in TD Bank Account. First of all, alone I didn't add Lance, but now I have a loan liability plus became more such a liability plus when a liability becomes more we need to create it since thousand secondly that tight money into the bank accounts the bank balance increased bank we know the bank is an asset, the asset becomes more plus acid plus when an asset becomes more we need to debit 10,000 and now I just copy and paste clone created 10,000 read thank David 10,000 10,000 David's team thousand created system isn't balance and then 4000 rain bite back on the land project. So, buy the land of 10,000 rain then repay 4000 and now I owe the bank 5000 I mean first of all, it's a LAN.

So liability when I repeat the line the liability reduced liability liability becomes less minus as a liability less David. cartels bye bye chick Thank you bank is an asset asset becomes less minus and we created 4000 men and then we copy in by learn David 5000 rain bank traded for Thousand Rand add up the David's 4000 and add up the credits 4000 event system is in balance in how to account for income. Income becomes more Foy being created and lace by debiting the account so much invoice to the value of 1009 and the positive and into the bank account. First of all we have sales, sales or income income account became more plus six income plus income becomes more than we created with 1000 reigns. Secondary deposited the money into the bank account says bank. Bank is an asset when we deposited the money, the asset It became more plus asset becomes more Plus, the asset becomes more we need to debit thousand and then we copy and paste.

So 1000 created bank 1000 man David and up the debits and the credits system isn't balanced then sell merchandise to the value of hundred and 15 and put the cash into the petty cash. petty cash is a little box that I have in my business. I put all the small amounts that are received into the petty cash and then I can use that petty cash to pay for future expenses. First of all sales because I sold the merchandise sales or income income became more or less income Plus, if it becomes More than we need to create it hundred and 50 then petty cash very cash isn't acid as it became more plus acid plus became more an asset becomes more than we need to debit hundred and 50 sales create 150 and petty cash debit hundred and 50 cents 150 debit and credit system isn't balance sell merchandise to the value thinkers on created so I sold this and the person will only pay me light on.

First of all we love sales. Sales is income income became more plus income plus traded 10,000 and I sold it on created this asset as a plus as it become more David 10,000 in sales styles created 10,000 names data. David 10,000 edit David's 10,000 names and have recruited 10,000 system is in balance. merchandise that was sold to data to the value of Orphan Train is written so I sold 14 grand and then he returned 500 grand. So now he owes me nine 500. So first of all we'll have sales, sales income Income income, we can list minus income minus we need to debit 500 and then I have a data the admin 10,000 in the new return form, so he only owes me nine 500 data is an acid, acid produced acid as it became less minus in we need to create a 500 train.

So sales David 500 trained and data created 500 grand and at the David's 500 grand out of the credits 500 grand system is in balance and then how to account for expenses. Expenses become more by being debited and leased by credit The account so purchase in the labs project for 1000 Rand First of all, invalids expenses expenses so expenses became more plus in we need to debit plus David on thousand logic bank bank is an asset and I saw I paid for it. So my bank balance reduced as it became less minus, then we need to create it 1000 so first of all we'll add stationery. That's an expense. My expenses became more with 1000 thousand in David's bank. Bank is an asset became less thousand men created after David's men and of the credit sales men system isn't balance purchased beans out of the petty cash 413 green paint is stationary it's an expense expenses became more expense plus David's continuing and then petty cash is an asset.

Whenever I find it my petty cash became less as we can please as minus credit and remain stationary and contain debit petty cash and contain created out of the debits and the credits. recruiting and contain system ism. Well it's just paper on credit for 10,000. So I bought the paper and I'm only going to pay for it later. So Piper cost of sales because I'm going to sell it at a profit, cost of sales. That's an expense.

When I bought it the expenses became more plus David Clinton created so I have a credit and that's a liability. liability became more liability plus created 10,000. Now I need to copy and paste cost of sales 10,000 in debit credit this in thousand Rand created at the debits and above The credit system isn't balanced. The same type of vectors are credited to the value of often. So I bought 14 then I returned 500. So now only nine 500.

So first of all cost of sales, that was an expense expense, the expense became less minus this credit card again and the creditor that's a liability reduced minus liability. minus, then we need to debit debit 500. So it's cost of sales. It's an expense for increasing credit and creditors. ability for them to train David, Eric David's 500 The credits 400 system isn't balance and inactive accounts for equity to equity becomes more by being credited and lease by debiting the shares to the value of 1000 are issued and taken up by shielded the shielded deposits the money into the bank account. So she's she's Oh equity equity became more plus plus an enemy created thousand and then bank the money was deposited into the bank bank is an asset.

As it becomes more plus an asset became more we need to debit debit 1000 men we copy and paste shares 1000 men and bank 1000 man and that is how easy accounting is. So you need to know that these five types of accounts and when they become more or less, and you need to know that we can divide those accounts into two categories balance sheet items, assets, liabilities and equity and income statement items, income and expenses. And if you know that in you know, when they become more or less then you can do accounting. Now in the next session, we'll look at value added tax. We'll do a few examples with value added tax, and then I'll take you through the accounting cycle. So go through the manual, make sure that you understand the basic principles, do a few of those examples and then I will See you in the next session.