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Accounting—The Language of Business

Accounting—The Language of Business. Lecture Presentation 1-2 How Business Activities Change the Accounting Equation. Learning Objectives. Define accounting terms related to starting a service business organized as a proprietorship and to changes that affect the accounting equation.

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Accounting—The Language of Business

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  1. Accounting—The Language of Business

    Lecture Presentation 1-2 How Business Activities Change the Accounting Equation
  2. Learning Objectives Define accounting terms related to starting a service business organized as a proprietorship and to changes that affect the accounting equation. Identify accounting concepts and practices related to starting a service business organized as a proprietorship and to changes that affect the accounting equation. Analyze how transactions affect accounts in an accounting equation
  3. Some Vocabulary: Pg. 10 Transaction= ACCOUNTING CONCEPT : Unit of Measurement=
  4. A Few More Concepts: Pg. 10 Account = Examples : Account Title= Account Balance = Capital =
  5. Transactions: Receiving Cash, Pg. 10 Transaction 1: August 1st. Received cash from owner as an investment, $5,000 What Accounts are affected?
  6. Transaction 2: August 3rd. Paid cash for supplies, $275.00 What accounts are affected Transactions: Paying Cash, Pg. 11
  7. Transaction 3: August 4th. Paid cash for insurance, $1,200.00 What accounts are affected Transactions: Paid Cash for Insurance, Pg. 11
  8. Transaction 4: August 7th. Bought supplies on account from Supply Depot, $500 What accounts are affected Transactions on Account: Bought Supplies on Account. Pg. 12
  9. Transaction 5: August 11th. Paid cash on account to Supply Depot, $300.00. What accounts are affected Transactions on Account: Paid Cash on Account. Pg. 12
  10. Term Review & Audit Understanding Transaction Account Account Title Account Balance Capital What must be done if a transaction increases the left side of the accounting equation? How can a transaction affect only one side of the accounting equation? To what does the phrase on account refer?
  11. Work Together/On Your Own Page 13…Work Together 1-2 Page 13…On Your Own 1-2 Page 19-21… Application Problem 1-2 Application Problem 1-3 Page 23… Read Cases for Critical Thinking (Case 1) Page 23… Analyzing Best Buy’s Financial Statements Answer questions 1 & 2
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