Workshop October 2015. Stage 3 Acquire (acquire best practices)
The Accounting Equation n Property: anything of value that is owned –cash and supplies to conduct...
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The Accounting Equation Property: anything of value that is owned – cash and supplies to conduct daily business – can be used to acquire other assets (supplies) or to operate business Financial Claims : rights or claims to property Property = Financial Claims (who owns it?)
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Transcript of The Accounting Equation n Property: anything of value that is owned –cash and supplies to conduct...
The Accounting Equation
Property: anything of value that is owned– cash and supplies to conduct daily
business– can be used to acquire other assets
(supplies) or to operate business
Financial Claims : rights or claims to property
Property = Financial Claims (who owns it?)
The Accounting Equation
Property = Assets: anything of value that is owned– cash and supplies to conduct daily
business– can be used to acquire other assets
(supplies) or to operate business
Financial Claims = Equities: financial rights or claims to the assets of a business
Assets = Equities
The Accounting Equation
Assets: anything of value that is owned– cash and supplies to conduct daily
business– can be used to acquire other assets
(supplies) or to operate business
Equities: financial rights or claims to the assets of a business
Assets = Equities
The Accounting Equation
Assets = Equities
$600 Assets $600 Equities
The Accounting Equation
Assets = Equities
$600 Assets $600 Equities
The Accounting Equation
Assets = Equities
$100 Assets $60 Equities$40 Equities
The Accounting Equation
2 Types of Equities:
Liabilities: amount owed by a business – Equity of those to whom money is
owed.
Owner’s equity - amount remaining after value of all liabilities is subtracted from value of all assets– Equity of the owner
The Accounting Equation
Assets = Equities
$100 Assets $60 Owner’s Equity
$40 Liabilities
The Accounting Equation
Assets = Equities
$100 Assets $60 Owner’s Equity$40 Liabilities
$100 Assets = $40 Liabilities + $60 Owner’s Equity
The Accounting Equation:
Assets = Liabilities + Owner’s Equity (OE)
I Owe You
Billing
Assets - Liabilities = Owner’s Equity (OE)
THE ACCOUNTING EQUATION
The Equation must ALWAYS be in balance!!!
Lesson 1-1, page 7
TERMS REVIEWaccounting
accounting system
accounting records
service business
proprietorship
Lesson 1-1, page 8
asset
equities
liability
owner’s equity
accounting equation
1-1 WORK TOGETHER, p.8
3,000 8,000
10,000 6,000
63,000 35,000
70,000 22,000
50,000 58,000
17,500 2,250
40,250 14,250
100,000 23,456
10,000 12,000
ASSETS = LIABILITIES + OWNER’S EQUITY
1-1 WORK TOGETHER, p.8
11,000 3,000 8,000
10,000 4,000 6,000
63,000 35,000 28,000
70,000 22,000 48,000
108,000 50,000 58,000
17,500 2,250 15,250
40,250 26,000 14,250
100,000 23,456 76,544
22,000 10,000 12,000
ASSETS = LIABILITIES + OWNER’S EQUITY
1-1 WORK TOGETHER, p.8
23,000 13,000
70,000 30,000
48,000 25,000
55,000 10,500
412,000 618,000
5,500 1,250
64,000 38,000
88,000 29,000
90,000
45,750
ASSETS = LIABILITIES + OWNER’S EQUITY
1-1 WORK TOGETHER, p.8
23,000 10,000 13,000
100,000 70,000 30,000
48,000 25,000 23,000
55,000 44,500 10,500
1,030,000 412,000 618,000
5,500 1,250 4,250
64,000 26,000 38,000
117,000 88,000 29,000
90,000
45,750
ASSETS = LIABILITIES + OWNER’S EQUITY
