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Diploma in Higher Education Studies

The accounting equation

HES 201 · Introductory Accounting — Week 5 of 16

CourseHES 201
Week5 of 16
SemesterII
TutorOnline in the course chat

This week’s topics

The accounting equation

  1. Assets = Liabilities + Capital
  2. How each transaction changes the equation

What you will be able to do

  • 2.1 Apply Assets = Liabilities + Capital to simple transactions.

Activity

Show how six transactions change the accounting equation.

Study materials

Further resources

  • Principles of Accounting Vol. 1, ch. 3.2–3.4: The accounting equation and transactions · PDF · OpenStax (2019); pp. 109–122 · for registered students
  • Introduction to Business 2e, ch. 14.3: Basic accounting procedures · PDF · OpenStax (2026), the accounting equation; pp. 480–483 · for registered students
  • On Double-Entry Bookkeeping: The Mathematical Treatment · Open-access article · Ellerman (2014), Accounting Education. Treats assets = liabilities + capital and T-accounts as simple algebra; a stretch read for maths-minded students. · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
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Course plan
  • Week 1: Why businesses keep financial records
  • Week 2: Who uses accounts?
  • Week 3: Income, expenses and profit
  • Week 4: Assets, liabilities and capital
  • Week 5: The accounting equation
  • Week 6: Double entry: debits and credits
  • Week 7: Recording sales, purchases and cash
  • Midterm: Midterm evaluation
  • Week 9: The income statement (profit and loss)
  • Week 10: The balance sheet
  • Week 11: Profit is not the same as cash
  • Week 12: Cash flow forecasts
  • Week 13: Ratios: how profitable is the business?
  • Week 14: Ratios: can the business pay its bills?
  • Week 15: Review and coursework completion
  • Final: Final assessment and submission
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