Essay Database

Accounting records the dual effect of double-entity bookkeeping. Each transaction affects at least two accounts - one on accounts debit and other on credit side. This assures, that the accounting equation (Assets = Liabilities) balances after each transaction. Transactions are first recorded in the journal and after that posted to the accounts in the general ledger. Accounts are classified as permanent accounts and temporary accounts. The temporary accounts are revenue and expense accounts and they relate …

…of land, buildings and long-term assets. Intangible assets, like sums paid for patents and licenses, are also counted as a part of investing. Cash flows from financing activities shows inflow like issuing shares and proffered shared or bonds emission and outflow which is connected to reacquiring shares or buying out bonds. In the end of cash flow statement net increase or decline in cash, the beginning of period and at the end cash is shown.