Job Opportunities in Accounting Accountants College degree in Accounting, CPA Bookkeepers Two years of high school Accounting Accounting Clerks One year of high school Accounting

Terms 1. Accounting Planning, analyzing, interpreting, and recording of financial information Accounting System A planned process for providing financial information useful to management Accounting Records Organized summaries of a business’ financial activities Financial Statements Financial reports that summarize the financial condition and operations of a business

A Business A place where products are manufactured and/or purchased and sold, or services are provided to earn a profit for owners and/or stockholders Service business – performs an activity for a fee Examples: TPS Lawn care Barber DJ

2. Types of Business Sole Proprietorship Partnership Corporation A business owned by one person Partnership A business where two or more persons combine their assets and skills Corporation A business owned by many people with the legal rights of an individual person

Accounting Concept Business Entity – A business’s financial information is recorded and reported separately from the owner’s personal financial information Examples: Personal vehicle Checking account House Personal utilities

3. The Accounting Equation Assets = Liabilities + Owners Equity Assets-anything of value that is owned Liabilities-an amount owed by a business Equities-financial rights to the assets of a business Owner’s Equity- Amount remaining after the value of all liabilities is subtracted from the value of all assets.

Sample accounts Cash Supplies Prepaid Insurance Accounts receivable Accounts payable

4. Business Activity Terms Transaction – A business activity that changes assets, liabilities, or owner’s equity. Account – A record summarizing all the information pertaining to a single item in the accounting equation. Account Title – The name given to an account. Account balance – The amount in an account. Capital – The account used to summarize the owner’s equity in a business.

Accounting Concept Unit of Measurement – when business transactions are stated in numbers that have common values Example U.S. uses dollars ($)

RECEIVING CASH page 10 Transaction 1 August 1. Received cash from owner as an investment, $5,000.00. LESSON 1-2

PAYING CASH Transaction 2 August 3. Paid cash for supplies, $275.00. page 11 Transaction 2 August 3. Paid cash for supplies, $275.00. Transaction 3 August 4. Paid cash for insurance, $1,200.00. LESSON 1-2

TRANSACTIONS ON ACCOUNT page 12 Transaction 4 August 7. Bought supplies on account from Supply Depot, $500.00. Transaction 5 August 11. Paid cash on account to Supply Depot, $300.00. LESSON 1-2

5. Revenue Transactions Revenue (Sales) – an increase in owner’s equity resulting from the operation of business Sale on account (Accounts receivable) – a sale in which cash will be received at a later date

Accounting Concept Realization of Revenue – revenue is recorded at the time goods or services are sold

Expense Transactions Expense – a decrease in owner’s equity resulting from the operation of business Examples: Rent Telephone bill Water bill

Other Cash Transactions Withdrawal – assets taken out of a business for the owner’s personal use

Ethics Ethics – the principles of right and wrong that guide decision making Business ethics – the use of ethics in making business decisions

REVENUE TRANSACTIONS page 14 Transaction 6 August 12. Received cash from sales, $295.00. Transaction 7 August 12. Sold services on account to Oakdale School, $350.00. LESSON 1-3

EXPENSE TRANSACTIONS page 15 Transaction 8 August 12. Paid cash for rent, $300.00. Transaction 9 August 12. Paid cash for telephone bill, $40.00. LESSON 1-3

OTHER CASH TRANSACTIONS Lesson 1-3 8/3/2018 OTHER CASH TRANSACTIONS page 16 Transaction 10 August 18. Received cash on account from Oakdale School, $200.00. Transaction 11 August 18. Paid cash to owner for personal use, $125.00. LESSON 1-3 Blue