CIMA BA3 Syllabus B. RECORDING ACCOUNTING TRANSACTIONS - Accounting equation - Notes 5 / 35
The Accounting Equation
E.g. Statement of Financial Position – M. Stark
| assets | $ | liabilities | $ |
| motor vehicles | 10000 | trade payables | 3000 |
| inventory | 4000 | propietor's interest | |
| receivables | 2000 | capital | 13000 |
| cash | 3000 | profit | 4000 |
| drawings | (1000) | ||
| -------- | -------- | ||
| 19000 | 19000 |
Assets = Liabilities
Assets = (Capital + Profit – Drawings) + Payables
Assets – Payables = Capital +Profit – Drawings
Net Assets = Proprietor’s Interest