Lecture Chapter 1 - Section 1 and 2

1. Chapter 1 Starting a Proprietorship Service Business - Techknow Consulting Chapters 1 - 8

7. Accounting is the Language of Business

9. Think for a moment about all the activity completed by a local business

13. Assets Anything of value that a business owns - things of monetary value Cash Supplies Prepaid Insurance Accounts Receivable Petty Cash

19. Classify the account!

20. Supplies Asset

21. Capital Owner’s Equity

22. Prepaid Insurance Asset

23. Accounts Payable, Mrs. Havice Liability

24. Accounting Equation Assets = Liabilities + Owner’s Equity Property = creditors financial claim + owner’s financial claim Must ALWAYS Balance!

25. Assets = Liabilities + Owner’s Equity Must ALWAYS Balance!

27. Work Together and On Your Own Page 9

29. Handout Find the Missing Number

30. How Business Activities Change the Accounting Equation Section 1-2 Page 10

31. Analyze how transactions affect accounts in the accounting equation Objective

32. Business activities change the amounts in the accounting equation

36. To keep track of transactions businesses use accounts

37. Account is a record summarizing all the information pertaining to a single item in an accounting equation All assets, liabilities and OE have their own account

39. The number of accounts needed by a business will vary Capital Accounts Payable Cash Accounts Receivable Supplies Prepaid Insurance Petty Cash Owner’s Equity Liabilities Assets

40. When a business transaction occurs, an accounting clerk analyzes the transaction to see how it affects each part of the accounting equation.

42. Before Business Starts Assets = Liabilities + Owner’s Equity $0 = $0 + $0

48. Work Together And On Your Own Page 13

50. Assignment 1-1 1-2