We will be recording business transactions for a company with the following details: Copyright © Houghton Mifflin Company. All rights reserved. 1-11-1.

Slides:

Advertisements

Similar presentations

The General Journal and the General Ledger

Advertisements

Property and Financial Claims, The Accounting Equation and

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

An accounting device used to analyze transactions is a called a/an ____________ T ACCOUNT.

Chapter Two T Accounts, Debits and Credits, Trial Balance, and Financial Statements.

Accounting Is Fun! Chapter Two

Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts

The General Journal and the General Ledger

Chapter 3 Business Transactions and the Accounting Equation

2–1 1-1 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

2–1 1-1 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Chapter One Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Edited by Nancy Goehring.

Home. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting State Says Standard: 3.0 The student will analyze and record.

Accounting Principles (1)

Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts

0 Glencoe Accounting Unit 2 Chapter 3 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved. Unit 2 The Basic Accounting Cycle Chapter 3 Business.

McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. Basic Financial Statements Chapter 2.

Business Transactions & the Accounting Equation

0 Glencoe Accounting Unit 2 Chapter 3 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved. Unit 2 The Basic Accounting Cycle Chapter 3 Business.

What is Accounting  Accounting is Planning, Recording, Analyzing and Interpreting financial information  A planned process for providing financial information.

Business Transactions and The Accounting Equation

$200 $300 $400 $500 $100 $200 $300 $400 $500 $100 $200 $300 $400 $500 $100 $200 $300 $400 $500 $100 $200 $300 $400 $500 $100 Terminology Financial Statements.

LESSON 1-3 How Transactions Change Owner’s Equity in an Accounting Equation.

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Property Property and Financial Claims Section 3.1 The purpose of.

The Accounting Equation

1–1 McQuaig Bille 1 College Accounting 10 th Edition McQuaig Bille Nobles © 2011 Cengage Learning PowerPoint presented by Douglas Cloud Professor Emeritus.

2-1 Skyline College Chapter Business Transactions The accounting process starts with the analysis of business transactions. A business transaction.

Business Accounts An account is a location within an accounting system in which the increases and decreases in a specific asset, liability, or owner’s.

Business Transactions and the Accounting Equation Making Accounting Relevant Every business has assets, liabilities (debts), and owner’s equity. Think.

Property=Property Rights items ownedright to use item / legal right to item’s value.

CHAPTER 1 Starting a Sole Proprietorship: Changes That Affect the Accounting Equation.

BUSINESS TRANSACTIONS AND THE ACCOUNTING EQUATION Chapter 3.

Review: What is the left side of the Accounting Equation called? Assets What is the right side of the Accounting Equation called? Equities: Liabilities.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

CENTURY 21 ACCOUNTING © Thomson/South-Western 1 LESSON 1-2 Lesson 1-1 THE ACCOUNTING EQUATION page 8.

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

Home. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Financial Claims in Accounting Property and Financial Claims.

Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Chapter 2 Starting a Proprietorship: Changes That Affect Owner’s Equity.

2 - 1 Debits and Credits – Analyzing and Recording Business Transactions Assets = Liabilities + Owner’s Equity Owner’s Equity = Capital – Withdrawals +

Financial Statements. Income statement Statement of owner’s equity Balance sheet Statement of cash flows.

1 CHAPTER 5 THE ACCOUNTING SYSTEM: CONCEPTS AND APPLICATIONS.

BASIC FINANCIAL STATEMENTS

Property and Financial Claims Property is anything of value that is owned or controlled. Financial Claim is the legal right to an item or property. Property.

Chapter 1 Test College Accounting. Question: An organization in which basic resources (inputs), such as materials and labor, are assembled and processed.

CHAPTER 3: Starting a Proprietorship: Changes That Affect Owner’s Equity.

TRANSACTIONS THAT AFFECT OWNER’S INVESTMENT, CASH AND CREDIT.

Learning Objectives © 2014 Cengage Learning. All Rights Reserved. LO1Describe the different users of accounting information. LO2Prepare a net worth statement.

Welcome Back Atef Abuelaish1. Welcome Back Time for Any Question Atef Abuelaish2.

Chapter 3 Business Transactions and the Accounting Equation

Property The purpose of accounting is to provide:

System to Analyze Transactions

ANALYZING TRANSACTIONS: The Accounting Equation

Starting a Proprietorship: Changes That Affect the Accounting Equation

Unit 2 The Basic Accounting Cycle

Accounting Concepts and Procedures

Accounting in Action.

Any item of property has at least one financial claim against it

Lesson 1-1 The Accounting Equation

Learning Targets Define and identify asset, liability, and owner’s equity accounts Record a group of business transactions, in column form, involving changes.

Any item of property has at least one financial claim against it

The Accounting Equation and Double-entry Bookkeeping 会计等式和复式记账法

Lecture 03 Classification of Accounts

Business Transactions and the Accounting Equation

Property and Financial Claims

Analyzing Transactions

Lesson 1-1 The Accounting Equation

Presentation transcript:

We will be recording business transactions for a company with the following details: Copyright © Houghton Mifflin Company. All rights reserved Owner’s name:L.P. Arch Business name:Arch Copy Co. Business type:Sole Proprietorship (one-person business)

 Sole proprietorship ◦ A one-owner business  Separate entity concept ◦ The concept by which a business is treated as a separate economic or accounting entity ◦ The business stands by itself, separate from its owners, creditors, and customers Copyright © Houghton Mifflin Company. All rights reserved

 Accounts ◦ The categories under the Assets, Liabilities, and Owner’s Equity headings  Double-entry accounting ◦ The system by which each business transaction is recorded in at least two accounts and the accounting equation is kept in balance Copyright © Houghton Mifflin Company. All rights reserved

1. What accounts are involved? 2. What are the classifications of the accounts involved? 3. Are the accounts increased or decreased? 4. Is the equation in balance after the transaction has been recorded? Remember: each business transaction must affect at least two accounts Copyright © Houghton Mifflin Company. All rights reserved

Transaction (a): Arch deposited $70,000 in a bank account in the name of business.

Copyright © Houghton Mifflin Company. All rights reserved Transaction (b): Bought equipment, paying cash, $33,000.

Copyright © Houghton Mifflin Company. All rights reserved Transaction (c): Bought equipment on account from Melton Office Supply, $7,000.

Copyright © Houghton Mifflin Company. All rights reserved Transaction (d): Paid Melton Office Supply, a creditor, $2,000.

Transaction (e): Arch invested her own personal data processing equipment in Arch Copy Co. having a fair market value of $6,200. Copyright © Houghton Mifflin Company. All rights reserved

Define and identify revenue and expense accounts Copyright © Houghton Mifflin Company. All rights reserved

 The amounts a business earns  Examples ◦ Fees earned for performing services ◦ Sales of merchandise ◦ Rent income, and interest income  May take the form of cash, credit card receipts, or accounts receivable (charge accounts) Copyright © Houghton Mifflin Company. All rights reserved

 Fees Earned for performing services  Sales Income from selling merchandise  Rent Income for the use of property  Interest Income for lending money  Credit Sales where cash will be received at a later time ◦ Example: Home Depot sells lumber to a customer and lets the customer pay later Copyright © Houghton Mifflin Company. All rights reserved

 The costs that relate to earning revenue (the costs of doing business)  Examples ◦ Wages ◦ Rent ◦ Interest ◦ Advertising  May be paid in cash, immediately or at a future time (accounts payable) Copyright © Houghton Mifflin Company. All rights reserved

 Wages Expense for labor performed  Rent Expense for the use of property  Interest Expense for the use of money  Advertising Expense  Expenses may be paid in cash when incurred (immediately) or at a later time  Expense incurred but not paid until later ◦ Example: Received a bill for a newspaper ad you took out last week ◦ Cash will be paid at a later time – involves Accounts Payable Copyright © Houghton Mifflin Company. All rights reserved

 Revenues and expenses are under the umbrella of owner’s equity  Revenue  Add to Capital account  Expenses  Subtract from Capital account Copyright © Houghton Mifflin Company. All rights reserved