(a) Name and describe the three concepts that form the basis of double entry bookkeeping, and explain how they form the basis of double entry bookkeeping.
(b) How does profit fit into the accounting equation?
(c) What is the purpose of double entry bookkeeping?
Alex Bisset started in business on 1 July 2011. His trial balance as at 30 June 2012 was as follows:
Alex Bisset trial balance as at 30 June 2012
Opening capital 10,000
Capital contributed during the year 6,000
Bank loan 5,000
Non-current assets 20,000
Receivables control 7,250
Payables control 6,750
Other expenses 8,000
Calculate profit earned during the period using both the balance sheet approach and the income statement approach to income determination.