CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-1 Using Accounting Principles and Records

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Chapter 1 Objectives Recording Departmental Purchases and Cash Payments After studying Chapter 1, you will be able to: 1.Define accounting terms related to departmental purchases and cash payments. 2.Identify accounting concepts and practices related to departmental purchases and cash payments. 3.Journalize and post departmental purchases and purchases returns. 4.Journalize and post departmental cash payments. 2 LESSON 1-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using Accounting Principles and Records asset: anything of value that is owned liability: an amount owed by a business equities: financial rights to the assets of a business owners’ equity: the amount remaining after the value of all liabilities is subtracted from the value of all assets stockholders’ equity: the owners’ equity in a corporation 3 LESSON 1-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using Accounting Principles and Records accounting equation: an equation showing the relationship among assets, liabilities, and owners’ equity source documents: original business papers from which information about business transactions is obtained double-entry accounting: the recording of debit and credit parts of a transaction 4 LESSON 1-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using Accounting Principles and Records journal: a form for recording transactions in chronological order special journal: a journal used to record only one kind of transaction account: a record summarizing all the information pertaining to a single item in the accounting equation ledger: a group of accounts general ledger: a ledger that contains all accounts needed to prepare financial statements 5 LESSON 1-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using Accounting Principles and Records subsidiary ledger: a ledger that is summarized in a single ledger account controlling account: an account in a general ledger that summarizes all accounts in a subsidiary ledger file maintenance: the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current 6 LESSON 1-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 1-1 ACCOUNTING EQUATION page 7 The Accounting Equation AssetsLiabilities Owners’ Equity += The Accounting Equation (LEFT side of equation) Assets (RIGHT side of equation) Liabilities Owners’ Equity + =

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 1-1 Right side Left side AssetsLiabilities Owners’ Equity =+ CREDIT DEBIT T Account (Right side)(Left side) GENERAL JOURNAL page 8

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 1-1 NORMAL BALANCES OF ACCOUNTS page 9

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 1-1 LEDGERS page 10

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 1-1 DEFINE TERMS REVIEW In Quizlet asset liability equities owners’ equity stockholders’ equity accounting equation source documents double-entry accounting journal special journal account ledger general ledger subsidiary ledger controlling account file maintenance page 11 Create: Chapter 1 AdvAcc (you will be adding 1-2 and 1-3 terms to this)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Exit Ticket for today: Audit Your Understanding How is the accounting equation most commonly stated? 2.What is the normal balance of an asset account? A revenue account? 3.What are the three needs met by Ztech’s account numbering system? 12 LESSON 1-1 In a Word Document, SaveAS: Chapter1-1AYUYourName And drop in my Inbox today!

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Complete the following assignments for Chapter 1-1 today Define Terms Review on page 11. Answer Audit Your Understanding questions on page 11. Complete Work Together 1-1 on Aplia – page 11 Complete On Your Own 1-1 on Aplia – page 11 Complete Application Problem 1-1 on Aplia – page LESSON 1-1