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LESSON 1-3 Pages 14-18

LESSON 1-3 Pages 14-18. How Transactions Change Owner’s Equity in an Accounting Equation. 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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LESSON 1-3 Pages 14-18

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  1. LESSON 1-3 Pages 14-18 How Transactions Change Owner’s Equity in an Accounting Equation 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. Classify accounts as assets, liabilities, or owner’s equity and demonstrate their relationships in the accounting equation.  Analyze how transactions affect the accounts in an accounting equation. Are they Revenue, Expenses, or Withdrawals?

  2. Transaction 6 August 12. Received cash from sales, $295.00. (Revenue) REVENUETRANSACTIONS page 14 Transaction 7 August 12. Sold services on account to Oakdale School, $350.00. (Revenue) LESSON 1-3

  3. Transaction 8 August 12. Paid cash for rent, $300.00.(Expense) EXPENSETRANSACTIONS Transaction 9 August 12. Paid cash for telephone bill, $40.00. (Expense)

  4. 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. (Withdrawal) LESSON 1-3

  5. Work together Text p. 17 Working Papers p. 9 • Determining how transactions change an accounting equation. Write the answer to the following problem in the Working Papers. 1. Place a plus (+) in the appropriate column is increased. Place a minus (-) in the appropriate column if the account is decreased + + 2. Sold services on account to Bowman Company (Revenue) 1. Received cash from sales (Revenue) 3. Paid cash for telephone bill (Expense) 5. Paid cash to owner for personal use (Withdrawal) 4. Received cash on account from Bowman Company + + - - + - - -

  6. Work together 1-3 Text p. 17 Working Papers p. 10 Determining how transactions change an accounting equation. Write the answer to the following problem in the Working Papers. 1. Place a plus (+) in the appropriate column is increased. Place a minus (-) in the appropriate column if the account is decreased + + 1. Sold services on account to Navarro Company (Revenue) 2. Received cash from sales (Revenue) 3. Received cash on account from Navarro Company 4. Paid cash to owner for personal use (Withdrawal) 5. Paid cash for rent (expense) + + + - - - - -

  7. TERMS REVIEW • revenue • sale on account • expense • withdrawals Assignment: 1-3 Application Problem Textbook p. 20 Working Papers p.13 MAKE SURE YOU WRITE IN WHETHER IT IS A REVENUE, EXPENSE, AND WITHDRAWAL TRANSACTIONS CHANGE AN ACCOUNTING EQUATION. Homework: Finish pages: 1-4 (STUDY GUIDE) I will collect the study guide! Read pages: 14-18 Finish 1-3 Application Problem

  8. 1-3 APPLICATION PROBLEM -300 -300 (expense) 325 0 375 300 200 800 -150 -150 (withdrawal) 175 375 300 200 650 0 +800 (revenue) +800 200 0 975 375 300 1,450 -100 -100 (expense) 875 0 375 300 200 1,350 +400 +400 (revenue) 875 400 375 300 200 1750 +650 (revenue) +650 400 375 300 200 2,400 1,525 -35 -35 (expense) 1,490 400 375 200 2,365 300 +300 -300 1,790 100 375 300 200 2,365

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