Prospectus of Emerald Oil Industries Limited

Prospectus of Emerald Oil Industries Ltd

Emerald Oil Industries Ltd. IPO Form in Word Format

IPO Form of Emerald Oil Industries Ltd.

Accounting Equation

Accounting Equation mentioned below:

   

A=L+E Here, A= Assets L= Liabilities E= Equity, where

Asset: Asset means the economic resources that belong to a business that is invested for making profit. For example, furniture, buildings, machineries of a business.

 Liability: Liability means the financial rigidity that has to be paid up after a certain period of time. That is it is the claim of the third party over the total assets of the business.

Owner’s Equity: If the claim of the third party is deducted from the total assets of the business the rest will be known as owner’s equity. That is the claim of the owner over the entire assets of the business is known as owner’s equity.Four elements affect owner’s equity. These are: ** Investment of owner ** Income ** Drawings ** Expense

we get - Assets = Liabilities + Capital + Revenue -Expenses - Drawings Means, A = L + (C + R – E – D)

Where, A=Assets L=Liabilities C=Capital R=Revenue E=Expenses D=Drawings

defination of Accounts and accounts classification

Financial transactions change the financial position of the business. By transaction sometime cash received sometime paid, sometime income earned sometime expense incurred, sometime asset increase sometime decrease, and again sometime liability increase sometime decrease. Income, Expense, Asset and Liability are not a particular type, there are different types of many such items in business organization. In a particular table/chart the income, the expense, the asset or the liability that is affected by transaction are recorded as per double entry system and it calculates the gross & net amount of that particular item. Accounts are prepared to know the continuous change and the net amount of each item. 

‘T’-Table
Account’s Title
Debit	Account’s code no……	Credit

Date	Particulars	J.F.	Taka	Date	Particulars	J.F.	Taka

‘Moving Balance’-Table

Account’s Title  Account’s code no…

Date	Particulars	J. F.	Debit  Taka	Credit  Taka	Balance
					Debit	Credit

Classification of Accounts

We can classify accounts very easily by analyzing the Accounting Equation (A=L+E)

Assets = Liabilities + Equity or Capital brought in by the owner + Assets

            = Liabilities + Income-Expense -Withdrawn by the owner 

By observing the above equation it possible to identify, that Accounts are five types.

1. Assets 2. Liabilities     3. Equity      4. Income 5. Expense