1. Welcome to AB113 Accounting For Non-Majors Unit 3
Professor David Levenstam
Unit 3 Seminar
AB113 Unit 3

2. Welcome to AB113 Accounting For Non-Majors Unit 3
Professor David Levenstam
Unit 3 Seminar
AB113 Unit 3

3. Reading, Help & Contact Reading: Survey of Accounting, Chapter 2
Tech Support (or free online)
Contact info:
AIM: LFCCEconinstruct (sign up for AIM at or Kaplan Google messenger
Office Hours: Wednesdays 7-8 & 9-10 PM ET
When ing, please include your full name & course number (AB113)
AB113 Unit 3

4. Please Read the Announcements! :-)
Located on the Course Home page
Contain important administrative and accounting material
Please check the announcements and the syllabus first for administrative questions you might have
AB113 Unit 3

5. This Week’s Assignments
Discussion (Don’t forget to post your initial response by Saturday! :-))
Quiz (You can take only once.)
Homework Assignment:
Submit to Dropbox
We have an Excel template in Doc Sharing for each homework set
Templates show you wrong answers (*) :-)
AB113 Unit 3

6. Quiz Weeks 2-9. 8 worth 20 each for a total of 160 (16% of your grade)
10 multiple-choice questions
You can take it only once
You have 1 hour
You can see the results results immediately now since the questions come from a pool
AB113 Unit 3

7. Please Read My “Hi Students” Posts! :-)
Typically located early on the board
Occasionally come later too
Could say “Hi Class” or “Warning, Warning, Danger, Will Robinson!!” :-D
Please give my tired old eyes a break and LABEL your multi-part answers! :-)
AB113 Unit 3

8. Jing Links and Scripts
To help you with the homework the course leads have created some voice presentations called Jings. You can find all the Jings in Doc Sharing by downloading the file named AC113-AB113 Jing Links.docx.
After downloading, click on the link for this week’s chapter to see and hear the presentation.
You can also download a script of each week’s presentation so that you can read the spoken words from the presentation later without reviewing the whole Jing presentation. For this week you can download AC113-AB113 Jing Chapter 2 Script.docx.
AB113 Unit 2

9. Accounting for Transactions
AB113 Unit 3

10. What is the Accounting Equation?
Review
What is the Accounting Equation?
AB113 Unit 3

11. What Is The Accounting Equation?
Assets = Liabilities + Owners’ Equity
AB113 Unit 3

12. Remember that at all times the Accounting Equation must balance!
That means that every transaction must balance too.
Every transaction will affect at least two accounts
Every transaction will affect the balance sheet, and might affect the income statement and statement of cash flows
AB113 Unit 3

13. Every Transaction Will Affect at Least Two Accounts 1
Could affect two assets, like buying supplies reduces Cash and increases Supplies
(which also affects the statement of cash flows)
AB113 Unit 3

14. Every Transaction Will Affect at Least Two Accounts 2
2. Could affect an asset and a liability, like paying Accounts Payable, which reduces both Cash and Accounts Payable
(which also affects the statement of cash flows)
AB113 Unit 3

15. Every Transaction Will Affect at Least Two Accounts 3
3. Could affect an asset and owners equity, like paying rent, which reduces both Cash and Retained Earnings
(which also affects the statement of cash flows and the income statement)
AB113 Unit 3

16. Every Transaction Will Affect at Least Two Accounts 4
4. Could affect two liabilities, like paying an account payable by giving the vendor a note payable, which reduces Accounts Payable and increases Notes Payable
(which does NOT affect the statement of cash flows or the income statement)
AB113 Unit 3

17. Every Transaction Will Affect at Least Two Accounts 5
5. A transaction could also affect two owners’ equity accounts, but that’s too advanced for the moment. :-)
AB113 Unit 3

18. Remember that at all times the Accounting Equation must balance!
Accountant on the Roof!
Remember that at all times the Accounting Equation must balance!
That means that every transaction must balance too.
(Otherwise you will fall off the roof and break your neck! :-D)
AB113 Unit 3

19. every transaction must balance too? :-D
Did I mention that
every transaction must balance too? :-D
AB113 Unit 3

20. effect each has on the accounting equation:
E2-10 textbook pages 68-69
10 transactions
effect each has on the accounting equation:
AB113 Unit 3

21. RTP! [Commercial Break :-D]
Professor Ken Perry:
RTP! RTP!
(Read The Problem!)
[And now back to Accountant on the Roof :-D]
AB113 Unit 3

22. First, which accounts & financial statement(s) does each affect?
a. Increase in one asset, decrease in another asset
b. Increase in an asset, increase in a liability
c. Increase in an asset, increase in owners’ equity (stockholders’ equity is what we sometimes call owners’ equity for a corporation since the owners are stockholders)
d. Decrease in an asset, decrease in a liability
e. Decrease in an asset, decrease in stockholders’ equity
First, which accounts & financial statement(s) does each affect?
AB113 Unit 3

23. E2-10 3 What accounts? Which letter? What financial statements?
1. Received cash from issuance of capital stock, $75,000
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

24. E2-10 4 Cash +$75,000 (Asset) Capital Stock + $75,000 (Equity)
1. Received cash from issuance of capital stock, $75,000
Cash +$75,000 (Asset)
Capital Stock + $75,000 (Equity)
c. Increase in an asset, increase in owners’ equity
Balance Sheet
Statement of Cash Flows (Financing)
+$75,000
AB113 Unit 3

25. E2-10 5 What accounts? Which letter? What financial statements?
2. Paid rent for October, $4,200
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

26. E2-10 6 2. Paid rent for October, $4,200 Cash -$4,200 (Asset)
Rent Expense +$4,200 (-$4,200 Equity)
e. Decrease in an asset, decrease in stockholders’ equity
Balance Sheet
Statement of Cash Flows (Operations)
-$4,200
Income Statement -$4,200
AB113 Unit 3

27. E2-10 7 What accounts? Which letter? What financial statements?
3. Paid advertising expense, $4,000
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

28. E2-10 8 3. Paid advertising expense, $4,000 Cash -$4,000 (Asset)
Advertising Expense +$4,000 (-$4,000 Equity)
e. Decrease in an asset, decrease in stockholders’ equity
Balance Sheet
Statement of Cash Flows (Operations)
-$4,000
Income Statement -$4,000
AB113 Unit 3

29. E2-10 9 What accounts? Which letter? What financial statements?
4. Received cash for providing delivery services, $39,750
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

30. E2-10 10 4. Received cash for providing delivery services, $39,750
Cash +$39,750 (Asset)
Service Revenue +$39,750 (Equity)
c. Increase in an asset, increase in owners’ equity
Balance Sheet
Statement of Cash Flows (Operations)
+$39,750
Income Statement +$39,750
AB113 Unit 3

31. E2-10 11 What accounts? Which letter? What financial statements?
5. Purchased supplies for cash, $2,500
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

32. E2-10 12 Cash -$2,500 (Asset) Supplies +2,500 (Asset)
5. Purchased supplies for cash, $2,500
Cash -$2,500 (Asset)
Supplies +2,500 (Asset)
a. Increase in one asset, decrease in another asset
Balance Sheet
Statement of Cash Flows (Operations)
-$2,500
AB113 Unit 3

33. E2-10 13 What accounts? Which letter? What financial statements?
6. Billed customers for delivery services on account, $81,200
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

34. E2-10 14 Accounts Receivable +$81,200 (Asset)
6. Billed customers for delivery services on account, $81,200
Accounts Receivable +$81,200 (Asset)
Service Revenue +$81,200 (Equity)
c. Increase in an asset, increase in owners’ equity
Balance Sheet
Income Statement +$81,200
AB113 Unit 3

35. E2-10 15 What accounts? Which letter? What financial statements?
7. Paid creditors on account, $9,280
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

36. E2-10 16 Cash -$9,280 (Asset) Accounts Payable -9,280 (Liability)
7. Paid creditors on account, $9,280
Cash -$9,280 (Asset)
Accounts Payable -9,280 (Liability)
d. Decrease in an asset, decrease in a liability
Balance Sheet
Statement of Cash Flows (Operations)
-$9,280
AB113 Unit 3

37. E2-10 17 What accounts? Which letter? What financial statements?
8. Received cash from customers on account, $25,600
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

38. E2-10 18 Cash +$25,600 (Asset) Accounts Receivable -$25,600 (Asset)
8. Received cash from customers on account, $25,600
Cash +$25,600 (Asset)
Accounts Receivable -$25,600 (Asset)
a. Increase in one asset, decrease in another asset
Balance Sheet
Statement of Cash Flows (Operations)
+$25,600
AB113 Unit 3

39. E2-10 19 What accounts? Which letter? What financial statements?
9. Determined that the cost of supplies on hand was $900; therefore, $1,600 of supplies had been used during the month.
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

40. E
9. Determined that the cost of supplies on hand was $900; therefore, $1,600 of supplies had been used during the month.
Supplies -$1,600 (Asset)
Supplies Expense +$1,600 (-$1,600 Equity)
e. Decrease in an asset, decrease in stockholders’ equity
Balance Sheet
Income Statement -$1,600
AB113 Unit 3

41. E2-10 21 What accounts? Which letter? What financial statements?
10. Paid dividends, $3,000.
What accounts?
Which letter?
What financial statements?
AB113 Unit 3

42. E2-10 22 10. Paid dividends, $3,000. Cash -$3,000 (Asset)
Retained Earnings -$3,000 (Equity)
e. Decrease in an asset, decrease in stockholders’ equity
Balance Sheet
Statement of Cash Flows (Financing) -$3,000
AB113 Unit 3

43. Questions? :-)
AB113 Unit 3