PPT - Double entry system | Accounting for CA Foundation PDF Download

 Page 1


CPT Section A - Fundamentals of Accountancy Chapter 2 
Unit 1 
 FCA SK Chhabra 
Page 2


CPT Section A - Fundamentals of Accountancy Chapter 2 
Unit 1 
 FCA SK Chhabra 
Capital 
•Means the amount which the owners  has invested in the firm or can 
claim from the firm. 
•For the firm, it is liability towards the owner because the owner is 
treated to be separate from the business.  
•It is also know as Owner’s Equity and net worth. 
Liabilities 
•Liabilities mean the amount which the firm owes to outsiders, that is 
excepting the proprietors 
Page 3


CPT Section A - Fundamentals of Accountancy Chapter 2 
Unit 1 
 FCA SK Chhabra 
Capital 
•Means the amount which the owners  has invested in the firm or can 
claim from the firm. 
•For the firm, it is liability towards the owner because the owner is 
treated to be separate from the business.  
•It is also know as Owner’s Equity and net worth. 
Liabilities 
•Liabilities mean the amount which the firm owes to outsiders, that is 
excepting the proprietors 
   
OR 
Page 4


CPT Section A - Fundamentals of Accountancy Chapter 2 
Unit 1 
 FCA SK Chhabra 
Capital 
•Means the amount which the owners  has invested in the firm or can 
claim from the firm. 
•For the firm, it is liability towards the owner because the owner is 
treated to be separate from the business.  
•It is also know as Owner’s Equity and net worth. 
Liabilities 
•Liabilities mean the amount which the firm owes to outsiders, that is 
excepting the proprietors 
   
OR 
Long –term 
Liabilities 
These are those 
liabilities which are 
payable after a long 
term, (generally  more 
than one year). 
For example long 
term loans, 
debentures, etc. 
Current 
Liabilities 
These are those 
liabilities which are 
payable in near future 
(Generally within one 
year).  
For example 
creditors, bank 
overdraft, bills 
payable, short term 
loans, etc. 
Page 5


CPT Section A - Fundamentals of Accountancy Chapter 2 
Unit 1 
 FCA SK Chhabra 
Capital 
•Means the amount which the owners  has invested in the firm or can 
claim from the firm. 
•For the firm, it is liability towards the owner because the owner is 
treated to be separate from the business.  
•It is also know as Owner’s Equity and net worth. 
Liabilities 
•Liabilities mean the amount which the firm owes to outsiders, that is 
excepting the proprietors 
   
OR 
Long –term 
Liabilities 
These are those 
liabilities which are 
payable after a long 
term, (generally  more 
than one year). 
For example long 
term loans, 
debentures, etc. 
Current 
Liabilities 
These are those 
liabilities which are 
payable in near future 
(Generally within one 
year).  
For example 
creditors, bank 
overdraft, bills 
payable, short term 
loans, etc. 
Assets 
•Assets are things of value owned by the business. 
•Anything which will enable the firm to get cash or a benefit in future, is 
an asset. 
•For example stock of goods, cash, furniture, machines, building, etc. 
Debtors 
•Person who owes money to the firm generally on account of credit sale 
of goods is called a debtors. He is called a debtor because he owes the 
amount to the firm