Chapters 2/3

Question 1

Accounting equation

Answer 1

Assets = Capital + Liabilities

Assets = (opening cap + profits - drawings) + liabilities

Question 2

Elements of financial statements according to IASB’s Conceptual Framework

Answer 2

Income
Expenses
Assets 
Liabilities
Equity

Question 3

Source documents

Answer 3

• Invoices (all) = source documents for credit transactions
• Credit notes (negative invoices)

NOT debit notes