CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning TERMS – We went over 2 already accounting accounting system accounting records financial statements service business proprietorship asset equities liability owner’s equity accounting equation ethics business ethics

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1 The Accounting Equation

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning THE ACCOUNTING EQUATION

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning We Know 5 out of 8 Already We Know 5 out of 8 Already asset equities liability owner’s equity accounting equation ethics business ethics Business Entity (concept)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 Review What’ s on the right side of the accounting equation? Ok, so what’s on the left? We completed application problem 1.1 independently already

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 We already know a few of these too Transaction Account Account Title Account balance Capital Unit of Measurement (concept )

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 Cash and On Account Transactions How Business Activities Change the Accounting Equation

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 88 RECEIVING CASH Look Familiar? Transaction 1 August 1. Received cash from owner as an investment, $5, page 10

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 99 PAYING CASH Transaction 2 August 3. Paid cash for supplies, $ Transaction 3 August 4. Paid cash for insurance, $1, page 11

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 TRANSACTIONS ON ACCOUNT Transaction 4 August 7. Bought supplies on account from Supply Depot, $ Transaction 5 August 11. Paid cash on account to Supply Depot, $ page 12

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 Reading Time Read chapter 1.1 & 1.2 Check: all words in portfolio? Can you answer the Audit Your Understanding questions? Lets do Working Together as a class (page 13) Complete On Your Own (page 13)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 TERMS REVIEW Read pages 14 – 16 adding the terms to your notebook Revenue sale on account expense Withdrawals page 13

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 13 Think Up to now how could My equity in the business (owner’s equity) be increased? Business operations (transactions) that increase OE are called _________ Business operations (transactions) that decrease OE are called _________ I’ll pay you tomorrow for the dental work is called s _ _ _ o _ a _ _ _ _ _ _ page 13

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Revenue and Expense Transactions How Transactions Change Owner’s Equity in an Accounting Equation

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 15 REVENUE TRANSACTIONS Transaction 6 August 12. Received cash from sales, $ Transaction 7 August 12. Sold services on account to Oakdale School, $ page 14

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 16 EXPENSE TRANSACTIONS Transaction 8 August 12. Paid cash for rent, $ Transaction 9 August 12. Paid cash for telephone bill, $ page 15

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 17 OTHER CASH TRANSACTIONS Transaction 10 August 18. Received cash on account from Oakdale School, $ Transaction 11 August 18. Paid cash to owner for personal use, $ page 16

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 18 Reading Time Check: all words in your portfolio? Can you answer the Audit Your Understanding questions? Lets do Working Together as a class (page 17) Complete On Your Own (page 17)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 19 Reading Time Check: are all the terms in your portfolio? Can you answer the Audit Your Understanding questions? Lets do Working Together as a class (page 29) Complete On Your Own (page 29)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 20 Think The account title of a _ _ _ _ _ _ r _ _ _ _ _ _ _ _ _ is increased when you make a sale on account. An expense reduces the c_ _ _ _ _ _ account. The account title of a _ _ _ _ _ _ _ p_ _ _ _ _ _ _ is increased when you agree to pay for supplies at a later date. Name the three ways OE can be effected 1. r 2. e 3. i

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 21 Lets review Complete application problems 1.3, 1.4 & 1.5 page 17