Accrual basis :states that the effects of transactions and other events are recoqinized when they occur and are reported in the financial statements of the periods to which they relate.
Income :is increase in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that resule in increases in equity, other than those relating to contributions from equity participants.(Income is the money earned by the business for selling goods or providing services)
Monetary Measurement Concept：all transactions, assets , liabilities, income, expenses and equity are recorded in a common dollar unit such as the $NZ

WHY FEES ARE INCOME?
1. denefition of income
Income is the money earned by a business, fees are the price pays as remuneration for services.
2.when a serives or other transaction happens and liability dose not change, asset increase, equity increase. because equity increase the profit increase, so income increase.

Government is interested in how well the economy is functioning.
Creditors are interested in the liquidity of the business, this means the ability of the business to repay its debts.
Owners are interested on the percentage return they will receive on their investment.
Emplayces are interested to know if their job is secure.
Managers is interested for making decisions on the daily operations of the business

why furniture is an asset?
1.defination.
2.if the business bought furinture, it owned by the business, if the business sold it, the money is the econimic benefit, buy furniture is past even, the money from furniture is future econimic benefit. so furniture is an asset.

Depreciation: is the systematic allocation of the cost of an asset less its residual value over its useful life.
Going Concern Concept: The business prepares its financial reports based on the assumption that as far as it is aware it will continue in its present operations into the foreseeable future.
They are recorded at their historical cost less accumulated depreciation, not at their market price.
Historical cost: assets are recorded at their price at the time of acqusition, this is : their original purchase price.
The order of liquidity, this refers to how quickly an asset will turn into cash.

Accrued Exoence(CL): due but unpaid Cr
Accrued Income (CA):due but not received Dr
Bad debts(AE): written off Dr
Prepayments(CA): paid in advance Dr
Income in advance(CL): received in advance Cr
Allowance for Doubeful Debts(negative CA): equal accounts receivable Cr
Inventory of Stationery(CA): not been used Dr

Selling price > Carring amount = loss on sale
Selling price < Carring amount = gain on sale

capital expenditure: Assets Unexpived have future benefits
revenue expenditure: Expenses expived have no future benefits

sales DR income summary CR (closing entry)
income summary DR purchases, expenses CR (closing entry)
income summary DR Inventory CR (to close inventory)
inventory DR income summary CR (for inventory as per stock sheets A55-B68)
income summary DR capital CR (transfor of profit)
capital DR drawings CR (cloaing entry)