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Chapter 2-1 (Pg. 24)

Chapter 2-1 (Pg. 24). What you should KNOW from Chapter 1 Know the basic accounting terms and accounting concepts related to starting a service business as a proprietorship ( See Chapter 1 Excel File )

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Chapter 2-1 (Pg. 24)

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  1. Chapter 2-1 (Pg. 24) • What you should KNOW from Chapter 1 • Know the basic accounting terms and accounting concepts related to starting a service business as a proprietorship (See Chapter 1 Excel File) • Classify accounts as assets, liabilities, or owner’s equity and demonstrate the Accounting Equation. Assets = Liabilities + Owners Equity • Analyze how accounts are affected by transactions and how this affects the Accounting Equation. (See Pages 9-11) • Prepare a Balance Sheet for a service business from information in an Accounting Equation (See Page 14)

  2. Chapter 2-1 (Pg. 24)

  3. Chapter 2-1 (Pg. 26)

  4. Chapter 2-1 (Pg. 24) Transaction 6 August 12. Received cash from sales, $325.00. Transaction 7 August 12. Sold services on account to Kids Time, $200.00. Lesson 2-1, page 26

  5. Chapter 2-1 (Pg. 27)

  6. PAID CASH FOR EXPENSES Transaction 8 August 12. Paid cash for rent, $250.00. Transaction 9 August 12. Paid cash for telephone bill, $45.00. Lesson 2-1, page 27

  7. Chapter 2-1 (Pg. 28)

  8. –100 (withdrawal) OTHER TRANSACTIONS Transaction 10 August 12. Received cash on account from Kids Time, $100.00. Transaction 11 August 12. Paid cash to owner for personal use, $100.00. Lesson 2-1, page 28

  9. Chapter 2-1 (Pg. 29)

  10. Chapter 2-2 (Pg. 30)

  11. BALANCE SHEET PREPARATION 1. Write the heading. 1 2. Prepare the assets section. 2 3 3. Prepare the liabilities section. 4 6 4. Prepare the owner’s equity section. 5 7 8 5. Add and compare the totals. 6. Rule single lines. 7. Write the totals. 8. Rule double lines. Lesson 2-2, page 30

  12. Chapter 2-2 (Pg. 31)

  13. Chapter 2-2 (Pg. 32)

  14. SUMMARY OF CHANGES IN OWNER’S EQUITY Transaction Change in Number Kind of Transaction Owner’s Equity 6 Revenue (cash) +325.00 7 Revenue (on account) +200.00 8 Expense (rent) –250.00 9 Expense (telephone) –45.00 11 Withdrawal –100.00 Net change in owner’s equity +130.00 Lesson 2-1, page 28

  15. TERMS REVIEW revenue sale on account expense withdrawals Lesson 2-1, page 29

  16. Chapter 2 • What you should KNOW from Chapter 2 • Know the basic accounting terms and accounting concepts that affect Owners Equity Transactions. (See Chapter 2 Excel File) • Analyze changes in an accounting equation that affect Owners Equity transactions in a service business organized as a proprietorship. See 2-1 Transactions!!! • Prepare a Balance Sheet for a service business from information in an Accounting Equation (See Page 30)

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