1. Accounting
BBI2O

2. What is Accounting?
the process of recording, analyzing and interpreting the economic activities of a business

3. Key Terms
Net Worth
Asset
Liability
Equity
Income
Expenses

4. Key Terms Asset Liability Something of value owned by the business
Debts or amounts owed to others

5. Key Terms
Equity
What you would have left after you have paid off your debts
The Accounting Equation:
Assets – Liabilities = Owner’s Equity

6. Key Terms Revenue Expenses
Money that business generates from business activities (i.e. sales)
Expenses
Money that the business must pay to carry on business activities (i.e. rent)

7. Key Terms Profit = Revenue - Expenses
The money that the business has earned after all expenses are paid
= Revenue - Expenses

8. Calculating your Net Worth
Your net worth is a measure of how valuable you are in terms of $$$.
On a piece of paper make two columns:
OWN OWE
List all the items and their approx $ value that you own and any monies that you may owe.
Net worth = own – owe
Are any of your assets more liquid than others?

9. Homework Read p. 176 – 178 in the textbook Answer questions on p. 179
1a) and b)
2a)
3a)