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    1. The document discusses accounting concepts related to running a lemonade stand business, including tracking assets, liabilities, equity, sales, costs of goods sold, expenses and profit over multiple days of operation. 2. Key financial documents covered are the balance sheet, which shows assets, liabilities and equity at a point in time, and the income statement, which tracks revenues, costs and profit over a period of time. 3. Accounting principles like tracking inventory, costs, revenues and expenses are aimed at aiding business decision making and performance analysis.

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    Intro To Accountancy

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    01 Introduction to Accounting Student Version

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    1. The document discusses accounting concepts related to running a lemonade stand business, including tracking assets, liabilities, equity, sales, costs of goods sold, expenses and profit over multiple days of operation. 2. Key financial documents covered are the balance sheet, which shows assets, liabilities and equity at a point in time, and the income statement, which tracks revenues, costs and profit over a period of time. 3. Accounting principles like tracking inventory, costs, revenues and expenses are aimed at aiding business decision making and performance analysis.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    23 views12 pages

    01 Introduction To Accounting Student Version

    Uploaded by

    rakeshblr
    1. The document discusses accounting concepts related to running a lemonade stand business, including tracking assets, liabilities, equity, sales, costs of goods sold, expenses and profit over multiple days of operation. 2. Key financial documents covered are the balance sheet, which shows assets, liabilities and equity at a point in time, and the income statement, which tracks revenues, costs and profit over a period of time. 3. Accounting principles like tracking inventory, costs, revenues and expenses are aimed at aiding business decision making and performance analysis.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 12

    1/16/2010

    1
    Spring 2010 Fundamentals of Business Information Systems
    INTRODUCTION TO
    ACCOUNTING
    Accounting Defined
    Process that aids in business decision making by





    business transactions and interpreting their effects
    on the business.
    1/16/2010
    2
    The accounting of a lemonade stand
    Keeping records
    1/16/2010
    3
    Keeping records
    A Balanced Scorecard
    What We Have Who Owns It
    Cash
    Total Total
    Cash
    Total Total
    1/16/2010
    4
    Accounting Equation


    Time to buy supplies
    World Class Lemonade
    Lemons 25
    Sugar 2.5 pounds
    Water 1 gallon
    Yield 30 cups
    Price List
    Lemons 20 each
    Sugar $2 for 5 pound bag
    Assets Liabilities
    Cash
    Owner's Equity
    Total Total
    A balance sheet is a snapshot in time and changes frequently.
    1/16/2010
    5
    Types of Accounting
    Financial accounting--preparation and presentation
    of financial reports showing business cash flow,
    profit/financial performance and financial
    position.
    Cost accounting--focuses on recording, defining,
    and reporting costs associated with specific
    operating functions
    Cost accounting our current operation
    _____________ / _______________ = ____________
    $___ / _____ = $_____ per cup
    "Cost per unit" is typically referred to as "unit cost".
    World Class Lemonade
    Lemons 25
    Sugar 2.5 pounds
    Water 1 gallon
    Yield 30 cups
    Price List
    Lemons 20 each
    Sugar $2 for 5 pound bag
    1/16/2010
    6
    Setting our price
    Many considerations in setting price, but above
    all






    You sold 50 cups of lemonade on day one!
    Lemonade
    50 per glass
    Income Statement
    1/16/2010
    7
    End of Day One
    Before day one:
    After day one:
    Assets Liabilities
    Cash
    Owner's Equity
    Total Total
    Assets Liabilities
    Cash
    Owner's Equity
    Total Total
    Day TwoNew Reality
    The glasses you used: Mom had to wash. From now on
    she's going to charge $2 a day for rental.
    Your neighbor has a corner lot and offers to let you set
    your stand up therefor $2 a day rental. And you
    also have to pay their son $1 a day to help out.
    All of the above are ________ (not COGS) that we have
    to pay each day.

    You go back to the store and buy $12 more inventory.
    Sales on day 2 are at the same price but this time
    you sell 60 cups.
    1/16/2010
    8
    End of Day TwoIncome Statement
    End of Day TwoBalance Sheet
    After day one:
    After day two:
    Assets Liabilities
    Cash
    Owner's Equity
    Total Total
    Assets Liabilities
    Cash
    Owner's Equity
    Total Total
    1/16/2010
    9
    Expanded Income Statement Format
    End of day 2 questions
    How often did our balance sheet change?
    Does the balance sheet show how much we sold?
    Does the balance sheet tell us our COGS?
    Does the balance sheet tell us our inventory?
    1/16/2010
    10
    Primary two financial accounting documents
    Balance Sheet
    Operating Statement, Profit and Loss (P&L Statement), or Income Statement
    Sales COGS = Gross Profit Gross Profit Expenses = Net Profit
    Financial Accounting
    Accounting focused on the reporting of the financial
    position of the organization.
    How would information gathered in the previous
    financial document help us in decision making?
    1/16/2010
    11
    SAP
    Details on Assets
    1/16/2010
    12
    Details on Liabilities and Equity

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