Ms. McDermott

  Go to  Click on Accounting (link on the left)  This is your page, check for homework assignments, classwork when absent, and to post any discussions Log on to computer

  Keeping track of financial records in an organized fashion  Professional & personal  Planning for financial responsibilities  Interpret and analyze financial information What is accounting?

  Jobs can be done more efficiently  Inaccuracies in accounting records usually lead to business failure  Allows for better decisions Why is accounting so important?

  How do you get it?  Who prepares it for you?  How do they keep track of how much they have paid you?  Legally responsible to provide accurate Tax Form W4 and CTW4 at the end of each calendar year. How many of you earn a paycheck?

 The Accounting Equation Lesson 1-1

  Proprietorship (Sole Proprietor)  Owned by 1 person  Service Business  Perform an activity for a fee (no tangible product involved) Our Approach

 The Accounting Equation Assets = Liabilities + Owner’s Equity

  Valuables owned Assets = Liabilities + Owner’s Equity  Money owed  Amount remaining after liabilities are subtracted from assets Assets - Liabilities = Owner’s Equity “Have” – “Owe” = “Value to Owners”

  Cash  Vehicle  Property  Supplies Assets = Liabilities + Owner’s Equity  Car Loan  Mortgage  Credit Card Debt  Money invested into business by the owner “Have” – “Owe” = “Value to Owners”

  Open Excel  File/Open/My Computer/R: Drive/Business Education/BusEd/Accounting/Chapter 1/Chapter 1 Workbook Pages  File/Save As/My Computer/G: Drive/  Create a new folder called “Accounting”  Save file as “Lastnamefirstinitial_Chapter1_Workbook” Practice

  Work Together as a class  On Your Own independently  Application Problem 1-1 To Be Completed:

 How Business Activities Change the Accounting Equation Lesson 1-2

  A business activity that changes assets, liabilities, or owners equity  Examples:  A business pays cash for supplies  Acctng equation MUST always stay in balance  Unit of measure must be the same  International business  Inventory Transactions

 1.Read 2.Identify accounts used 3.Classify accounts Reading a Transaction

  A record summarizing information pertaining to a single item in the accounting equation  Examples/ Account Titles :  Cash  Supplies  Accounts Payable  Capital  Account Balance is the amount in an account Accounts

  Open Excel  File/Open/My Computer/R: Drive/Business Education/BusEd/Accounting/Extra Form Templates/Accounting Equation  File/Save As/My Computer/G: Drive/  Save file as “Lastnamefirstinitial_Chapter1_Accounting_Equation” Practice

  Barbara Trevino started Encore Music to provide music lessons (proprietorship providing a service). She uses $10,000 of her own money to invest in Encore Music.  Transaction #1: August 1. Received cash from owner as an investment, $10,000 Encore Music

  Cash (Asset)  Barbara Trevino Capital (Owner’s Equity) What accounts are affected?

  Cash is increased (Asset)  Barbara Trevino Capital is increased (Owner’s Equity) How are they affected?

  Transactions #2 through #5 together (pages 10 and 11)  Work Together as a class  On Your Own independently  Application Problem 1-2 (page 17 in text) Complete

 Reporting Financial Info on a Balance Sheet Lesson 1-3

  Financial statement that reports assets, liabilities, and owner’s equity on a specific date.  Prepared with the expectation the business will operate indefinitely. What is a Balance Sheet?

 1.Assets Left 2.Liabilities Right side of BS 3.Owner’s Equity Right side of BS Body of a Balance Sheet

  Open Excel  File/Open/My Computer/R: Drive/Business Education/BusEd/Accounting/Extra Form Templates/Balance Sheet  File/Save As/My Computer/G: Drive/  Save file as “Lastnamefirstinitial_Chapter1_Balance_Sheet” Practice

 1.Center Heading: name of business, name of report, date of report 2.Prepare Asset side CENTERED on the LEFT 1.Write each asset account below this aligned left 3.Prepare Liabilities side CENTERED on the RIGHT 1.Write each liability account below this aligned right 4.Prepare Owner’s Equity side CENTERED on the RIGHT 1.Write each owner’s equity account below this aligned right Steps to a Balance Sheet

 5.Add all asset, liability, and owner’s equity amounts 1.Make sure your Balance Sheet is in balance, if not find the errors before completing any more work. 6.Rule a single line across the last asset and last liability 1.A single line means amounts are to be added or subtracted 7.Write Total Assets and the amount under the single rule on the right. Write Total Liabilities and Owner’s Equity under the single rule on the left. 8.Rule double lines below the amount column totals. 1.A double line means totals have been verified as correct. Steps to a Balance Sheet

  Work Together as a class  On Your Own independently  Application Problem 1-4 & 1-5 (page 19 in text)  Mastery Problem 1-6 (page 19 and 20 in text) Complete