Lesson 1-1 8/23/2018 “We are what we repeatedly do. Excellence, then, is not an act, but a habit.” --Aristotle LESSON 1-1

Standards – Accounting Cycle Lesson 1-1 8/23/2018 Chapter 1 Starting a Proprietorship: Changes that Affect the Accounting Equation Accounting: The Language of Business Lesson 1-1: The Accounting Equation Standards – Accounting Cycle AC1-1.1 Define accounting and explain the purpose of the accounting system.   AC1-1.2 Explain the importance of following Generally Accepted Accounting Principles (GAAP) and interpret the standards correctly. AC1-1.3 Demonstrate a working knowledge of the fundamental accounting equation.

Terms Accounting Accounting system Accounting records Lesson 1-1 8/23/2018 Terms pages 6-7 I can define key accounting terms related to the accounting equation. Accounting Accounting system Accounting records Financial statements Service Business Proprietorship Business Entity-- (GAAP concepts in purple) I can list reasons why accounting records are important. I can explain Why the concept of Business Entity is important when starting a business. LESSON 1-1

THE ACCOUNTING EQUATION Lesson 1-1 8/23/2018 THE ACCOUNTING EQUATION Page 8 I can for the missing amount in an accounting equation. solve Asset Equities: Equity of those to whom money is owed Equity of the owner (aka “owner’s equity”) Liability Owner’s Equity I can define key accounting terms related to the accounting equation. Do Assessment: Work together 1-1, On Your Own 1-1 LESSON 1-1

I can define key accounting terms related to the accounting equation. Lesson 1-1 8/23/2018 TERMS REVIEW page 9 I can define key accounting terms related to the accounting equation. accounting accounting system accounting records financial statements service business proprietorship asset equities liability owner’s equity accounting equation ethics business ethics You will need to know ALL of the Chapter 1 terms for our Chapter 1 exam. To help you review/study, we will be completing a study guide, and there are online resources for you to use to study. Here’s the website: http://accountingxtra.swlearning.com/multicolumn/xtra/ch01_xtra.html Ethics: the principles of right and wrong that guide an individual in making decisions Business Ethics: the use of ethics in making business decisions DO: Application Prob. 1-1 LESSON 1-1

I can define key accounting terms related to the accounting equation. Lesson 1-1 8/23/2018 LESSON 1-2 How Business Activities Change the Accounting Equation Terms: Transaction Account Account Title Account Balance Capital Unit of Measurement US=Dollars, Japan=Yen China=Yuan, France=Euro I can define key accounting terms related to the accounting equation. LESSON 1-1

I can balance the accounting equation as transactions take place. Lesson 1-1 8/23/2018 RECEIVING CASH page 10 Transaction 1 August 1. Received cash from owner as an investment, $5,000.00. I can balance the accounting equation as transactions take place. LESSON 1-1

I can balance the accounting equation as transactions take place. Lesson 1-1 8/23/2018 PAYING CASH page 11 Transaction 2 August 3. Paid cash for supplies, $275.00. I can balance the accounting equation as transactions take place. Transaction 3 August 4. Paid cash for insurance, $1,200.00. LESSON 1-1

TRANSACTIONS ON ACCOUNT Lesson 1-1 8/23/2018 TRANSACTIONS ON ACCOUNT page 12 Transaction 4 August 7. Bought supplies on account from Supply Depot, $500.00. I can balance the accounting equation as transactions take place. Transaction 5 August 11. Paid cash on account to Supply Depot, $300.00. LESSON 1-1

Guided Practice DO: Application problem 1-2: Work together 1-2: Lesson 1-1 Guided Practice 8/23/2018 DO: Work together 1-2: OYO 1-2: Text p 13. Working papers p 8 Application problem 1-2: I can explain Why the concept of Unit of Measurement is important to using the accounting equation. LESSON 1-1

How Transactions Change Owner’s Equity in an Accounting Equation Lesson 1-1 8/23/2018 LESSON 1-3 How Transactions Change Owner’s Equity in an Accounting Equation Terms: Revenue Sale on Account: aka: “charge sale” Expense Withdrawals Realization of Revenue I can define key accounting terms related to the accounting equation.

Lesson 1-1 8/23/2018 REVENUE TRANSACTIONS page 14 Transaction 6 August 12. Received cash from sales, $295.00. I can balance the accounting equation as transactions change Owner’s Equity. Transaction 7 August 12. Sold services on account to Oakdale School, $350.00. LESSON 1-1

Lesson 1-1 8/23/2018 EXPENSE TRANSACTIONS page 15 Transaction 8 August 12. Paid cash for rent, $300.00. I can balance the accounting equation as transactions change Owner’s Equity. Transaction 9 August 12. Paid cash for telephone bill, $40.00. LESSON 1-1

OTHER CASH TRANSACTIONS Lesson 1-1 8/23/2018 OTHER CASH TRANSACTIONS page 16 Transaction 10 August 12. Received cash on account from Oakdale School, $200.00. I can balance the accounting equation as transactions change Owner’s Equity. Transaction 11 August 12. Paid cash to owner for personal use, $125.00. LESSON 1-1

Guided Practice and Chapter Assignment Lesson 1-1 8/23/2018 Guided Practice and Chapter Assignment Standards – Accounting Cycle AC1-1.1 Define accounting and explain the purpose of the accounting system.   AC1-1.2 Explain the importance of following Generally Accepted Accounting Principles (GAAP) and interpret the standards correctly. AC1-1.3 Demonstrate a working knowledge of the fundamental accounting equation. Do: Work together 1-3 OYO 1-3 Application problem 1-3; Study Guide Chapter 1 Summative assignments for Chapter 1: Mastery Problem 1-4 Challenge Problem 1-5 I can show how business activities change the accounting equation using a dual entry accounting system. I can show how business activities change Owner's Equity in the accounting equation using a dual entry accounting system. LESSON 1-1