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Understanding the Accounting Equation: Key Transactions and Equities

Learn how business activities impact the accounting equation, with a focus on transactions changing equities and financial statements. Explore terms, ethics, and the owner's equity.

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Understanding the Accounting Equation: Key Transactions and Equities

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  1. LESSON 1-1 The Accounting Equation

  2. THE ACCOUNTING EQUATION page 8 LESSON 1-1

  3. accounting accounting system accounting records financial statements service business proprietorship asset equities liability owner’s equity accounting equation ethics business ethics TERMS REVIEW page 9 LESSON 1-1

  4. LESSON 1-2 How Business Activities Change the Accounting Equation

  5. Transaction 1August 1. Received cash from owner as an investment, $5,000.00. RECEIVING CASH page 10 LESSON 1-1

  6. Transaction 2August 3. Paid cash for supplies, $275.00. PAYING CASH page 11 Transaction 3August 4. Paid cash for insurance, $1,200.00. LESSON 1-1

  7. Transaction 4 August 7. Bought supplies on account from Supply Depot, $500.00. TRANSACTIONS ON ACCOUNT page 12 Transaction 5 August 11. Paid cash on account to Supply Depot, $300.00. LESSON 1-1

  8. TERMS REVIEW page 13 • transaction • account • account title • account balance • capital LESSON 1-1

  9. LESSON 1-3 How Transactions Change Owner’s Equity in an Accounting Equation

  10. Transaction 6 August 12. Received cash from sales, $295.00. REVENUE TRANSACTIONS page 14 Transaction 7 August 12. Sold services on account to Oakdale School, $350.00. LESSON 1-1

  11. Transaction 8 August 12. Paid cash for rent, $300.00. EXPENSE TRANSACTIONS page 15 Transaction 9 August 12. Paid cash for telephone bill, $40.00. LESSON 1-1

  12. Transaction 10 August 18. Received cash on account from Oakdale School, $200.00. OTHER CASH TRANSACTIONS page 16 Transaction 11 August 18. Paid cash to owner for personal use, $125.00. LESSON 1-3

  13. TERMS REVIEW page 17 • revenue • sale on account • expense • withdrawals LESSON 1-1

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