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CHAPTER 14 16-3 Preparing a Balance Sheet 486
16-4 Recording Closing Entries for Income Statement
Accounting for Uncollectible Accounts Accounts 494
Receivable 410
16-5 Preparing a Post-Closing Trial Balance 502
14-1 Uncollectible Accounts Receivable 412
14-2 Writing Off and Collecting Uncollectible Accounts
Receivable 418
CHAPTER 17
Financial Statement Analysis 514
14-3 Promissory Notes 425
17-1 Vertical Analysis of an Income Statement 516
CHAPTER 15 17-2
17-3
Vertical Analysis of a Balance Sheet 522
Horizontal Analysis 528
Preparing Adjusting Entries and a Trial Balance 438
17-4 Analyzing Financial Statements Using Financial
15-1 Planning Adjusting Entries 440 Ratios 533
15-2 Adjusting Merchandise Inventory and Interest
Receivable 446 Reinforcement Activity 2—Part B
15-3 Adjusting Accumulated Depreciation 450
An Accounting Cycle for a Corporation: End-of-Fiscal-Period
15-4 Calculating Federal Income Tax 455
Work 545
CHAPTER 16
Financial Statements and Closing Entries for a
Corporation 470
16-1 Preparing an Income Statement 472

16-2 Preparing a Statement of Stockholders’ Equity 482
Part
3 Accounting
for a Merchandising Business Organized as
a Corporation—Adjustments and Valuation
CHAPTER 18 CHAPTER 19
Acquiring Capital for Growth and Development 550 Accounting for Plant Assets, Depreciation, and
Intangible Assets 582
18-1 Short-Term Debt Financing 552
18-2 Long-Term Debt Financing 558 19-1 Buying Plant Assets and Paying Property Taxes 584
18-3 Capital Stock 565 19-2 Calculating Depreciation Expense 589
18-4 Acquiring Additional Capital 569 19-3 Journalizing Depreciation Expense 594
19-4 Disposing of Plant Assets 598
19-5 Declining-Balance Method of Depreciation 603
19-6 Buying Intangible Assets and Calculating Amortization
Expense 607
Contents v
Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Accounting for Inventory 618 End-of-Fiscal-Period Work for a Corporation 672
20-1 Determining the Quantity of Merchandise Inventory 620 22-1 Preparing Adjusting Entries 674
20-2 Determining the Cost of Merchandise Inventory 626 22-2 Preparing an Income Statement, Statement of
20-3 Estimating Inventory 633 Stockholders’ Equity, and Balance Sheet 685
22-3 Preparing a Statement of Cash Flows 691
Reinforcement Activity 3—Part A 22-4 Preparing Closing and Reversing Entries 700
An Accounting Cycle for a Corporation: Journalizing and Reinforcement Activity 3—Part B

Posting Transactions 643
An Accounting Cycle for a Corporation: End-of-Fiscal-Period
CHAPTER 21 Work 715
Accounting for Accruals, Deferrals, and Reversing

Entries 646
21-1 Accruals 648

21-2 Deferrals 658
Part
4 Additional
Accounting Procedures
Accounting for Partnerships 720 Recording International and Internet Sales 750
23-1 Forming a Partnership 722 24-1 Recording International Sales 752

23-2 Distribution of Net Income and Owners’ Equity 24-2 Recording Internet Sales 761
Statements 728
23-3 Dissolving a Partnership 735
Appendix A: Accounting Concepts A-1 English Glossary G-1

Appendix B: NIKE, Inc. Fiscal 2015 10-K Spanish Glossary G-11
eport (Selected Pages) B-1
R
Index I-1
Appendix C: 21st Century Communication
Features Index FI-1
Skills for Accountants C-1
Appendix D: Recycling Problems D-1
Appendix E: Answers to Audit Your
Understanding E-1
vi Contents
Transform Your High School Accounting
Course with Century 21 Accounting, from
the leader in high school accounting education
for 100+ years.
Input from educators, accounting professionals, content experts,

and high school accounting students has shaped the 10th Edition
of Century 21 Accounting. new critical-thinking activities, real-
world applications, and enhanced online learning solutions—
including Online Working Papers and Automated Accounting
Online computerized accounting software—help you transform
your accounting course.
▶▶ Proven pedagogy using a renowned instructional design
supports teaching the mechanics of accounting and measuring
learning outcomes in the 10th Edition.
▶▶ Greater emphasis on conceptual understanding and
financial statement analysis encourages students to
apply accounting concepts to real-world situations and
develop higher-level thinking skills to make informed business
decisions.
▶▶ Critical thinking and technology use, as defined by the
Partnership for 21st Century Skills, have been expanded
throughout with these new features to give students real-world
practice and help them master valuable skills:
Forensic Accounting Think Like an Accountant
Financial Literacy Why Accounting?
▶▶ Commercial technology is integrated throughout the text
to equip students to work with Microsoft Excel®, Sage 50
Accounting, QuickBooks®, and Automated Accounting Online.
Students are given step-by-step instructions and the flexibility to
use a variety of popular commercial software.
Sage 50 Accounting
▶▶ Unparalleled teaching tools and assessment resources—in addition to exclusive CourseCare instructor
training support—help ensure your success.
vii

Transform Your Course with
The Century 21 Accounting program provides students with a

complete learning system designed to keep students on track
and helps you measure outcomes.
The organization ensures clear student understanding. Students start with a

service business organized as a proprietorship and merchandising businesses
organized as corporations before concluding with special topics, partnerships,
and the recording of international sales and electronic transactions.
The step-by-step instructional approach clearly reinforces text

concepts, while the consistent use of T accounts increases student
comprehension of journalizing transactions.
NEW! Learning Objectives connect the chapter coverage from beginning to end. Learning objectives
are identified at point of introduction and in the end-of-chapter problems, making it easier for students to
stay on track. By paying attention to the Learning Objectives, students can focus on what is important and
you can better measure outcomes.
“The tagging of the

Learning Objectives
is such an easy and
effective way for
students to look back
at a particular objective
when they are working
problems instead of
having to flip through
pages randomly until
they find what they are
looking for.”
Rosemary Hemsell,
Grapevine High School,
Grapevine, TX
viii
Measurable Outcomes
The lesson structure consists of three to five lessons per chapter

and corresponding assessment activities. Each end-of-lesson section
includes a Work Together problem and an On Your Own assignment.
The Work Together problem allows you to demonstrate the new
accounting concept to
your class. Students
can then check their
understanding by
completing the On
Your Own assignment.
The end-of-chapter
material includes
short application
problems to ensure
students’ understanding
before they tackle the
longer mastery and
challenge problems.
“I like how the

problems address
objectives separately,
then together in the
Mastery problem,
and at another
level with the
Challenge problem.”
Rosemary Hemsell,
Grapevine High School,
Grapevine, TX
ix

Transform Your Course
Problem Solving
Creativity
Greater emphasis on conceptual understanding and financial statement analysis
has been incorporated into the 10th Edition, making it easier to balance coverage of accounting
mechanics with how accounting information is used to make business decisions.
Critical THinking Activities

NEW!
21st Century Skills are infused throughout the text to provide
more opportunities for higher-level thinking
included in the end-of-chapter material, provides and analysis, preparing students for college
activities that cultivate mastery of essential skills and career readiness.
such as problem solving, communication, and
technology use as defined by the Partnership for
21st Century Learning. Acquisition of the knowledge
and skills taught
in this feature will
prepare students
to compete in a
workplace that
demands creativity
and innovation.
NEW!
Think LIke an Accountant
presents challenging problems that
correspond to higher-level thinking skills
based on the criteria established in
Bloom’s Taxonomy.
Excel templates are provided for

students to use as an analysis tool
to compare and contrast employer
benefit plans and analyze how their
decisions affect the company’s
bottom line.
x
with 21st Century Skills
Communication
Information Literacy
NEW!
Financial Literacy
guides students in the exploration of both business finance issues
and critical personal finance topics through engaging activities that
provide opportunities for students to apply valued skills such as
problem solving, critical thinking, and technology use as defined by
the Partnership for 21st Century Skills.
NEW!
Global Awareness
presents the role of
accounting in a global
environment and the
cultural implications NEW!
that occur as a
Ethics in Action
result of the trans- responds to the increasing
migratory nature of importance of ethics and personal
the marketplace. It character in accounting today.
reflects current trends, These ethical dilemmas assist
concerns, and issues students with decision-making
in global business, and and critical-thinking skills and
cultural diversity in the challenge students’ personal
workplace. Cultural topics will address character development.
both international and domestic issues.
“The use of Excel in this feature is an extremely

important skill. Many of my high school students who
come back to visit while they are in college have said
they wish they would have used Excel more in class,
because it is something they are doing a lot of in
college business courses.”
Kevin Willson, York Suburban School District, York, PA
xi

Transform Your Course by Bringing
Forensic Accounting presents criminal investigations involving fraud,

providing students the opportunity to apply what they’re learning in class
to a real-world scenario. Students will examine the fraud scenarios using
Excel® to analyze the data and continue the investigation.
Why Accounting?
provides examples of
how accounting skills are
applicable in a variety of business situations.
Tied to the National Career Clusters, this feature illustrates how
accounting knowledge transfers into the workplace and validates
accounting’s importance in the marketplace.
Careers in Accounting, designed to encourage students to think

about their future in accounting, features a broad range of careers in the
accounting field and promotes accounting as a profession through
one-on-one interviews with various accounting professionals.
Sage 50 Accounting
Accounting in the Real World: fascinating

chapter openers spotlight actual businesses
Commercial technology, integrated into the end of
that interest students, such as TOMs Shoes,
each chapter, equips students to work with Microsoft
iTunes, McDonald’s, and Google, with
Excel®, Sage 50 Accounting, QuickBooks®, and
intriguing questions that connect chapter
Automated Accounting Online with step-by-step
topics to what’s driving business decisions in
instructions and the flexibility to use multiple versions
today’s organizations.
of software.
xii
Accounting Practices to Life
Bring Accounting Practices to Life with
Relevant Simulations
Manual and automated simulations for each cycle give your students hands-on, real-world experience in
accounting practice. Automated simulations are completed using Automated Accounting Online,
powered by CengageNOW.
z First Year
Simulation 1: Red Carpet Events

Students encounter accounting principles and practical applications as they
experience the challenges of operating an event-planning service business
organized as a proprietorship. Students complete the simulation after Chapter 8.
Completion time 4-8 hours.
Simulation 2: Authentic Threads
Students bring fashion trends into the world of accounting while they practice
accounting applications in this dynamic merchandising business organized as
a corporation. Students complete the simulation after Chapter 17. Completion
time 10-17 hours.
Simulation 3: Digital Diversions
Students go digital in this engaging simulation with the latest retail software,
cell phones, video cameras, music, and more in this merchandising business
organized as a corporation. Students complete the simulation after Chapter 22.
Completion time 10-15 hours.
z Advanced
Simulation 1: Organic Aisles
Students sell organic produce and grocery items in Organic Aisles,
a departmentalized grocery store organized as a corporation. Students
complete the simulation after Chapter 4. Completion time 10-20 hours.
Simulation 2: Adventure Gear
Adventure rules as students bring adventure sport gear and accessories into
the world of accounting within this merchandising business organized as a
corporation. Students complete the simulation after Chapter 14. Completion time
10-20 hours.
xiii

Transform Your Course with Century 21
Online Working Papers

The market’s first Online Working Papers, powered ▶▶ Mirror the C21 Accounting Print
by Aplia, feature automatic grading for instructors and Working Papers
immediate feedback for students. C21 Accounting ▶▶ Immediate Feedback for Students
Online Working Papers mirror the print working papers ▶▶ Automatically Graded Assignments
and tests including online journals, ledgers, worksheets, for Instructors
financial statements, and other forms students use to ▶▶ Chapter tests included
complete their textbook problems and tests.
Students who stay engaged with material put more effort into the
course. Century 21 Online Working Papers give students instant
feedback, making sure they are learning from each question
while gaining a better understanding of accounting basics.
New to ONline Working Papers for 10e

▶▶ Enhanced student feedback will provide students with
additional instruction beyond right and wrong answers
▶▶ Algorithmic problems will provide students with
additional opportunities to practice
▶▶ Device independent, the new online working papers will
work on PCs, MACs, iPads, and other devices
The Online Working Papers automatically grade assignments,

relieving instructors of the burden of grading homework by hand. As
students complete the assignments, the instructor receives a complete
assessment of their work and comprehension levels, while their grades are
instantly recorded in the instructor’s online grade book.
The Online Working Papers keep instructors informed about student participation, progress,
and performance through real-time graphical reports. Instructors can easily download, save,
manipulate, print, and import student grades into their current grading program.
What Users are Saying!

▶▶ 73% say that student performance has improved in their class
since using the Online Working Papers!
▶▶ 82% report that their students are more engaged in the Accounting course.
▶▶ 75% say their ability to monitor student progress has improved.
▶▶ 57% say that after using Online Working Papers, their students are more likely to
enroll in further study in accounting and/or other business education courses.
Visit services.cengage.com/dcs/aplia for a demo!
xiv
Accounting Digital Solutions
NEW! Automated Accounting Online is
the next generation of the Automated Accounting
software program that has successfully
introduced students to computerized accounting
for many years. Automated Accounting Online
provides the functionality of commercial software
incorporated with educational features that make
teaching and learning computerized accounting
easy. The completely redesigned interface is even
more realistic and similar to what users see in
commercial software programs such as Sage 50
Accounting and QuickBooks®.
Automated Accounting Online:

▶▶ Is integrated into every chapter of Century 21 Accounting
▶▶ Provides immediate feedback for students
▶▶ Allows automatic grading for instructors
▶▶ Is compatible with PCs and MACs
▶▶ Is available anywhere with internet connection
Student Companion Website extends the learning

experience well beyond the book with study tools,
chapter outlines, math worksheets, and data files.
www.c21accounting.com
Getting ready to start your class?

Need help getting started?
Available exclusively from Cengage Learning, ▶▶ 24/7 on-demand training resources

CourseCare is a revolutionary program designed to ▶▶ Regularly scheduled professional training
provide you with an unparalleled user experience with
▶▶ Dedicated Digital Solutions Coordinator
your Cengage Learning Digital Solution.
Please contact the CourseCare team at schoolscoursecare@cengage.com.
To learn more about the live and recorded training sessions available, please visit services.cengage.com/dcs.
xv

Transform Your Teaching Experience
with tools to make your job easier
Automatic grading with Online Working Papers Instructor’s Resource CD places all
and Automated Accounting Online, designed to key instructor resources at your
minimize your time grading, while maximizing your fingertips in this all-in-one convenient
impact within the classroom. Immediate feedback for tool that includes:
students and automatic grading for you will save you
▶▶ Lesson plans and PowerPoint® presentations
time and give you an instant sense of each student’s
▶▶ Solutions to Working Papers, Tests, Audit tests,
comprehension. Grades are automatically entered in
an instructor’s online gradebook. Sage 50 Accounting, QuickBooks®, Simulations
▶▶ Crossword puzzles and solutions
Wraparound Teacher’s Edition features ▶▶ Transparency masters (Solutions, Ruling,
reduced student pages with comprehensive Full Color Illustrations)
instructor support, including: ▶▶ Interactive spreadsheets
▶▶ An updated instructional design framework ▶▶ Block scheduling correlation with
▶▶ Essential questions Century 21 Accounting
▶▶ Tips for differentiated instruction
Instructor Companion Site offers password-
▶▶ Teaching ideas to increase student engagement
protected teacher resources including solutions,
▶▶ An overview of each accounting part lesson plans, PowerPoint presentations, and
▶▶ Resource Integration Guide simulation keys.
▶▶ Check figures
Assessment Resources
Written by ▶▶ ExamView® computerized test bank allows

you to easily create custom tests within minutes.
high school Simply edit, add, delete, or rearrange questions
accounting teachers, with this easy-to-use software.
for high school
accounting teachers.
▶▶ Chapter and Part Test Masters

Instructor’s Resource Kit includes Two separate test masters for every chapter and
comprehensive teaching resources all in one part include problems and objective questions.
place, including:
▶▶ Teacher’s Edition Chapter and Part Tests
▶▶ Working Paper and Recycling Problem Provide solutions for convenient grading.
solutions (textbook problems)
▶▶ Chapter and Part Tests solutions
▶▶ Simulation keys
xvi
Reviewers
Cindy Anderson Rosemary Hemsell Matthew H. Pohlman

Business and Computer Teacher CTE Teacher Business Instructor
Wyndmere Public School Grapevine High School CAL Community School District
Wyndmere, North Dakota Grapevine, Texas Latimer, Iowa
Carolyn Holt Balis Dana R. Hurda Sherilyn Reynolds

Business Educator Business and Accounting Instructor Business Teacher
Parma City School District Evansville High School Sam Rayburn High School
Parma, Ohio Evansville, Wisconsin Pasadena, Texas
Doris Curry Joseph Kramer Martha Scarberry

Business Teacher Business and Information Technology Vice Principal
Alief Kerr High School Teacher B. Michael Caudill Middle School
Houston, Texas Seton-La Salle Catholic High School Richmond, Kentucky
Pittsburgh, Pennsylvania
Dan Doseck Lisa Slattery
Business Instructor Alvin R. Kroon Accounting Teacher
Alexander High School Teacher Spring Woods High School
Albany, Ohio Kamiak High School Houston, Texas
Mukilteo, Washington
Fahryka P. Elliott Alice Smith
Business Education Teacher Cheryl L. Linthicum CPA, PhD Business Teacher
Henrico High School Accounting Professor Lafayette Central Catholic Jr./Sr. High
Henrico, Virginia University of Texas School
San Antonio, Texas Lafayette, Indiana
Kathryn L. Focht CPA
Educator Claire Martin Jeynelle M. Strickland
Wilson High School Business Educator Teacher and Chairperson
West Lawn, Pennsylvania Sully Buttes High School Savannah Christian Preparatory
Onida, South Dakota School
Kathleen O’Connor Ford Savannah, Georgia
Business Teacher Jane Melroy
Rochester Adams High School Business Teacher Eileen Wascisin
Rochester Hills, Michigan Skyline High School Business Teacher
Pratt, Kansas Lynden High School
Mike Hackman Lynden, Washington
Business and Accounting Teacher James P. O’Connell
Columbus North High School Business and Technology Teacher Kevin W. Willson
Columbus, Indiana Bishop Canevin High School Business Education Department
Pittsburgh, Pennsylvania Chairperson
Kathleen Harenza York Suburban School District
Business Education Teacher Rose Pettit York, Pennsylvania
Mukwonago High chool Business Education Teacher
Mukwonago, Wisconsin Hopkins High School
Minnetonka, Minnesota
Accounting
Part
1 Accounting
for a Service Business
Organized as a
Proprietorship
Chapter 1 Starting a Proprietorship:

Changes That Affect the
Accounting Equation
Chapter 2 Analyzing Transactions

into Debit and Credit Parts
Chapter 3 Journalizing Transactions
Chapter 4 Posting to a General

Ledger
Chapter 5 Cash Control Systems
Chapter 6 Work Sheet and Adjusting

Entries for a Service
Business
Chapter 7 Financial Statements for a

Proprietorship
Chapter 8 Recording Closing Entries

and Preparing a Post-
Closing Trial Balance for a
Service Business
©OlgaLIS, iStock
2 Part 1 Accounting for a Service Business Organized as a Proprietorship

THE BUSINESS— Chart of Accounts
DELGADO WEB SERVICES
Delgado Web Services is the
business used in the chapters in General Ledger
Part 1 to illustrate the accounting Balance Sheet Accounts Income Statement

(100) ASSETS Accounts
concepts and procedures for a 110 Cash (400) REVENUE
120 Petty Cash
service business organized as 130 Accounts Receivable—
410 Sales
(500) EXPENSES
a proprietorship. Delgado Web Main Street Services
510 Advertising Expense
140 Accounts Receivable—
520 Cash Short and Over
Services is owned by Michael Valley Landscaping
530 Communications
150 Supplies
Expense
Delgado. Mr. Delgado designs, 160 Prepaid Insurance
540 Equipment Rental
(200) LIABILITIES Expense
maintains, and hosts websites for 210 Accounts Payable—Canyon 550 Insurance Expense
Office Supplies 560 Miscellaneous Expense
small businesses. 220 Accounts Payable— 570 Supplies Expense
Mountain Graphic Arts
(300) OWNER’S EQUITY
310 Michael Delgado, Capital
320 Michael Delgado, Drawing
330 Income Summary
The chart of accounts for Delgado Web Services is illustrated here for
easy reference as you study the accounting cycle for a proprietorship in
this textbook.
Julien Bastide/Shutterstock.com
marema/Shutterstock.com
Accounting for a Service Business Organized as a Proprietorship Part 1 3

Chapter 1 Starting a Proprietorship:
Changes That Affect the
Accounting Equation
LEARNING OBJECTIVES
After studying Chapter 1, in addition to defining
key terms, you will be able to:
LO1 Describe the different users

of accounting information.
LO2 Prepare a net worth
statement and explain its
purpose.
LO3 Classify accounts as assets,
liabilities, or owner’s
equity and demonstrate
their relationship in the
accounting equation.
LO4 Analyze the effects of
transactions on the
accounting equation.
LO5 Distinguish between cash
and on account transactions.
LO6 Compare and contrast the
types of transactions that
increase and decrease
owner’s equity.
LO7 Explain the difference
©Daniel Kourey, iStock/©jim pruitt, iStock
between expenses and

liabilities.
theboone/iStockphoto.com
4 Chapter 1 Starting a Proprietorship: Changes That Affect the Accounting Equation

Background: ©VRJOYNER, SHUTTERSTOCK; Real World: PRNEWSFOTO/TOMS SHOES/AP PHOTO; Head Icon: ©pavlen, iStock
Accountin g I n T h e R ea l Wo rl d
TOMS Shoes
H ave you ever thought about owning your own

business? Someone who owns, operates, and takes
the risk of a business venture is called an entrepreneur.
Within a short period, TOMS Shoes has given over
45 million pairs of shoes to children on 5 continents.
America was built on the hard work of entrepreneurs as

many men and women pursued their dream of business
ownership by developing new ideas and turning them
into business opportunities.
The goal of a business entrepreneur is to seek 1. How is social entrepreneurship different from nonprofit
economic benefit. In recent years, a new type of entre- organizations?
preneur has emerged. These new entrepreneurs are 2. Identify a problem in your local community and create a
driven by the same innovation and productivity, yet they solution for it by identifying a social entrepreneurship.
seek social value rather than profits. These entrepreneurs
are also agents of change. They direct their entrepre-
neurial energy toward seeking solutions for society’s
problems.
Blake Mycoskie is one of today’s leading social
entrepreneurs. Blake sold his driver’s education business
to fund a social entrepreneurial idea. While visiting
Argentina, Blake noticed the number of children who
had no shoes. Being shoeless limited the children’s ability
to attend school. Even worse, being shoeless increased
the risk of developing a disabling foot disease called
podoconiosis. So Blake Mycoskie started a business
called TOMS Shoes. The company name comes from the
word “tomorrow” because Mycoskie wants to create
a better future for impoverished children. Mycoskie’s
mission statement is: “I’m going to start a shoe company.
For every pair of shoes that we sell, I will give a pair to
someone who needs them.”
Key Terms
• accounting • equity • equities • capital account
• accounting system • ethics • owner’s equity • creditor
• financial statements • business ethics • accounting equation • revenue
• net worth statement • service business • transaction • sale on account
• asset • proprietorship • account • expense
• liability • business plan • account title • withdrawals
• personal net worth • GAAP • account balance
Starting a Proprietorship: Changes that Affect the Accounting Equation Chapter 1 5

LESSON
1-1 Accounting in Action

©Chris Schmidt, iStock
LO1 Describe the different users of accounting information.

LO2 Prepare a net worth statement and explain its purpose.
The Role of Accounting LO1

Every day, numerous business activities take place. For renting a venue? Do you know how many tickets you
example, you may stop at a convenience store on the will need to sell to make a profit?
way to school to buy juice or school supplies. Have you All of these questions involve numbers. However,
ever wondered how many bottles of juice are sold each numbers alone cannot be used to make all business
day? Or how much the store owner pays for rent or util- decisions. For instance, knowing how many bottles of
ities? Or how much the store’s employees are paid? Or orange juice were sold is important, but the data do not
how much the store owes to suppliers? Or would this tell whether the store is making a profit. Data must be
business be a good investment? recorded and reported in accounting reports. Then, the
Perhaps you have thought about starting a business information can be provided to business owners, man-
by forming a local band. Do you know how to price agers, investors, and others to make business decisions
your tickets to make a profit? Do you know the cost of and measure performance.
What Is Accounting?
Whether you are going to invest in a business, work or recordkeeping. Bookkeeping is only the recording
for a multimillion-dollar company, or start your own part of the accounting process. Accounting goes much
business, you will always use financial information. further than just keeping records. Accounting involves
Accounting provides financial information to users for analyzing and interpreting a business’s operations to
making decisions. The information is communicated determine its financial well-being and plan its future
to everyone who needs it to make good business deci- success.
sions. Therefore, accounting is often referred to as the An accounting system is a planned process designed
language of business. Just like any language, it has its to compile financial data and summarize the results in
own terminology and rules that must be learned and accounting records and reports. Financial reports that
practiced. Understanding this language is essential summarize the financial condition and operations of
for using data to communicate effectively, making a business are called financial statements. Business
good financial decisions, and successfully operating owners and managers use financial statements to make
a business. Inaccurate accounting records can make a business decisions.
business fail. A failure to understand accounting infor- For many years, all accounting information was
mation can result in poor business decisions both per- recorded using paper and ink. In today’s business
sonally and professionally. world, accounting software programs are widely used
Accounting is the process of planning, recording, to record and process financial data. However, account-
analyzing, and interpreting financial information. The ing software only processes data. Skill and knowledge in
accounting process includes recording financial activi- accounting are essential in order to effectively use the
ties, but accounting is not the same as bookkeeping technology and correctly interpret results.

Accounting in Personal Life LO2
Accounting can be used to make personal financial between personal assets and personal liabilities is called
decisions as well as business decisions. When buying personal net worth. Net worth shows the financial value
a car, one of the first steps in the loan application is of the owner after paying all liabilities. A larger number
to complete a personal financial data sheet. A formal reflects a higher net worth. In business, net worth is also
report that shows what an individual owns, what an called equity. Equity is the difference between assets and
individual owes, and the difference between the two is liabilities.
called a net worth statement. A net worth statement
allows the person extending the loan to see the financial Total Assets Total Liabilities Net Worth (also
position of a borrower on a specific date and make a (owned) – (owed) = known as Equity)
lending decision.
In order to calculate net worth, items that are
owned must be identified and assigned a realistic value.
Anything of value that is owned is called an asset.
PERSONAL NET WORTH STATEMENT
Examples of assets are cars, bikes, real estate, cash
(including bank accounts), and jewelry. Amounts that A personal net worth statement shows the assets, liabili-
are owed to others must be identified and assigned ties, and net worth of an individual. The personal net
values. An amount owed is called a liability. Examples worth statement below shows a positive net worth. This
of liabilities include amounts owed to friends or rela- means that Saida Khelchy owns more than she owes,
tives, car loans, and credit card bills. Net worth is the something a lender looks upon favorably. A negative
total estimated value of everything owned (assets) less amount for net worth would reflect more debt than
the total of everything owed (liabilities). The difference assets, something a lender would not favor.
Saida Khelchy
Net Worth Statement
September 27, 20--
Assets
Savings Account 2,000.00
Total Assets Class Ring 250.00
Total Assets 2,250.00
Liabilities
Owed to Parents 50.00
Total Liabilities Ace Electronics 125.00
Total Liabilities 175.00
Net Worth Net Worth 2,075.00
Assets – Liabilities = Net Worth
Note: When statements are prepared on ruled accounting forms, it is stan-

dard practice to place double rules under the last amount on the statement to
indicate that the amount is a total. Dollar signs are not used on these forms.
Accounting in Action Lesson 1-1 7

ETHICS in ACTION
Accounting Scandals their jobs. Millions of individuals lost billions of

dollars in investment and retirement accounts.
Rock the Financial These scandals rocked the public’s confidence in
World the accounting profession and the stock markets.
Congress reacted by passing the Sarbanes-Oxley
E ntering the 21st century, Enron, WorldCom, Act of 2002, requiring greater oversight of publicly
Tyco, and Arthur Andersen were three of the traded companies.
most celebrated names in corporate America.
INSTRUCTIONS
But the actions of a few individuals forced
financial mammoths Enron and WorldCom into Search the Internet to obtain an article that describes
©Luca di Filippo, iStock

bankruptcy. Arthur Andersen, once one of the an accounting scandal such as the Enron, WorldCom,
prestigious “Big 5” accounting firms, was forced Adelphia, HealthSouth, or Parmalat scandals. Write
out of business. These accounting scandals caused a one-paragraph summary that describes what
hundreds of thousands of employees to lose happened and the individuals involved.
Ethics in Business of right and wrong that guide an individual in making

decisions are called ethics. The use of ethics in making
A business and its owner have contacts with custom- business decisions is called business ethics.
ers, suppliers, employees, government representatives, Making ethical business decisions is a skill that can
and many others. A successful business maintains a be learned. Each chapter of this textbook contains a
good relationship with all of these contacts. One way feature on business ethics. You will learn a model for
to maintain a good relationship with these contacts is making ethical decisions and apply it to make ethical
to conduct all business in an ethical way. The principles business decisions.
Written Communication State information truthfully and tactfully, eliminate

exaggerations, and support viewpoints with objective
Accounting information is often communicated in facts from credible sources.
written documents, from e-mails to formal reports. To Does my writing style demand the reader’s atten-
increase the impact of messages you write, follow these tion? Use simple words and short sentences. Resist the
preparation guidelines: temptation to use accounting terms or overly compli-
Why am I writing and who is my audience? Think cated words your reader may not understand. Overused
through your message and understand it thoroughly expressions, overly casual expressions, and negative tone
before you begin writing. Ask yourself why you are reduce the impact of the message and your credibility.
preparing the message, and then adapt it to be readily The messages should reflect correct, standard English
understood by the reader. Envisioning your reader helps and language used in a professional setting.
you to see an issue from another perspective. Consider Is the document free from grammatical and format-
all you know about the reader including age, economic ting errors? Use spell-check to locate simple keying
level, educational/occupational background, culture, errors. Then proofread carefully for embarrassing and
expectations, and needs. damaging grammatical errors that spell-check cannot
Is the message logically organized for easy read- detect. Format according to a conventional business
ing? Develop an outline that places your central idea format. Make the document visually appealing through
and pertinent information in an appropriate sequence. formatting techniques such as numbered or bulleted
Am I communicating responsibly and ethically? Your lists, headings that organize content into logical sec-
writing affects others and must uphold your personal tions, and tables and graphs.
values and your company’s code of ethical conduct.

End of Lesson Review
LO1 Describe the Audit your understanding

different users of
accounting information. 1. What is accounting?
2. Why is accounting called the language of business?
LO2 Prepare a net 3. Describe a scenario in which you, as a nonaccountant, might use accounting.
worth statement and
explain its purpose. Work together 1-1
Megan Finder, a recent college graduate, is applying for her first credit card. The
Terms Review creditor has asked for a personal net worth statement. Megan has $800.00 in her
accounting checking account and owns a scooter worth $2,000.00. She owes Jaycee Auto
$920.00 and River College $125.00. Complete a net worth statement for Megan
accounting system
Finder. Use the current date.
financial statements
net worth statement On your own 1-1
asset
Anthony Clement is applying for a car loan. The lending institution requires a
liability personal net worth statement. Anthony currently has $1,085.00 in cash, and
personal net worth his camera is worth $635.00. He also owes Kelley Electronics $83.00, and Vista
equity Travel $305.00. Complete a net worth statement for Anthony Clement. Use the
current date.
ethics
business ethics
©Candice Cusack, iStock
Accounting in Action Lesson 1-1 9

LESSON
1-2 How Business Activities

Change the Accounting
Equation
LO3 Classify accounts as assets, liabilities, or owner’s equity and demonstrate their relationship in the accounting equation.
LO4 Analyze the effects of transactions on the accounting equation.
LO5 Distinguish between cash and on account transactions.
The Business—Delgado Web Services

Michael Delgado has designed his own personal website legally responsible for all debts, taxes, and losses; there-
as well as websites for some friends. The father of one of fore, the unlimited liability is a disadvantage. However,
his friends runs a plumbing business. He asked Michael the owner receives all profits. The life of the business
if he could design a website for the plumbing busi- ends when the owner is no longer willing or able to
ness. After the website went live, the plumber’s busi- continue the business. A proprietorship is sometimes
ness increased by 25% in the first six months. Michael referred to as a sole proprietorship.
realized that he might be able to make a career from Michael researches how to start a business. He learns
designing websites. that a common practice is to first write a business plan.
A business that performs an activity for a fee is called A business plan is a formal written document that
a service business. Examples of service businesses might describes the nature of a business and how it will oper-
include landscapers, salons, babysitters, or providers of ate. The section of the business plan that describes the
medical services. Since Michael is the only owner of his operation of the business is shown on this page. The
business, the business is a proprietorship. A proprietor- financial part of the business plan will be developed as
ship is a business owned by one person. The owner is you study the chapters in Part 1.
Business Plan Suppliers: Artwork and photographic services

will be purchased from Mountain Graphic Artists.
Description: Delgado Web Services will be a sole Equipment will be rented for a monthly fee with a
proprietorship owned by Michael Delgado. The service agreement. The agreement will keep the
business has no employees. The business will computer, server, and software up to date.
design, maintain, and host websites for local Marketing: The business has business cards and
businesses that want an Internet presence. A key a promotional brochure. Local businesses that
function of the service is advising customers on the could benefit from having an Internet presence
kinds of information that can be included on the have been identified. The marketing plan includes
website and ways to increase business. testimonials about existing websites the owner has
Fees: Fees will vary depending on the size and already designed.
amount of detail on each website, as well as the
consulting time spent with the customer.

FINANCIAL LITERACY
Watch Your Money When 72 is divided by the interest rate, the

answer is the number of years it will take to double
Grow—The Rule of 72 the money. This formula assumes that no additional
deposits are made. The Rule of 72 illustrates the
O ne of the best ways to make money is to let

money make more money. An amount paid
for the use of money for a period of time is called
advantage of saving early. For example, if $500 is
deposited in a bank account that earns 6% interest, it
will take 12 years to double the $500. The calculation
interest. Money deposited in certain kinds of bank
is 72 ÷ 6 = 12 years.
accounts increases when the bank pays interest on
the deposit. Bank deposits are further increased AC TIV ITIE S
with compound interest. Compound interest is
1. Rachel dreams of starting her own business. She will
interest paid on an original amount deposited
need a $6,000 investment to start; however, she has
in a bank plus any interest that has been paid. In saved only $3,000. The bank pays a 4% interest rate
other words, the original money deposited earns that is compounded annually. How many years will it
interest, and then the interest earns additional take for Rachel’s money to double?
interest. 2. Rachel would like to open her business in two years. What
The “Rule of 72” is a simple way to see the power percent interest would Rachel need to receive to double
of compound interest. This formula calculates how her money in two years?
long it will take an original investment to double 3. Apply the Rule of 72 to debt. If Rachel’s credit card
©Norebbo, iStock
its value at a given interest rate when left alone in charges 18% interest, and she makes no payments,
an interest-bearing account. how long will it take for Rachel’s debt to double?
Accounting Standards and Rules

The standards and rules that accountants follow occur, a concept reference, such as [CONCEPT:
while recording and reporting financial activities are Business Entity], is used to indicate an application of
commonly referred to as generally accepted account- a specific accounting concept. A brief description of
ing principles or GAAP. Pronounced as “gap,” GAAP each accounting concept used in this text is also pro-
helps ensure that all companies follow the same set of vided on the Century 21 Accounting website at www
guidelines and practices when reporting financial data. .C21accounting.com.
Following GAAP principles and concepts ensures con- Since Delgado Web Services is a new business, Michael
sistent reporting. must design the accounting system that will be used to
An example of a GAAP concept is Unit of Measure keep the accounting records. Michael must be careful
ment, in which business activities are stated in numbers to keep these accounting records separate from his own
that have common values—that is, using a common personal financial records. For example, Michael owns a
unit of measurement. In the United States, business car for personal use. However, the financial records for
activities are recorded in dollars. Using the unit of mea- Delgado Web Services must not include information
surement concept, the financial reports of businesses can about Michael’s car or other personal belongings. The
be clearly stated and understood in numbers that have accounting concept Business Entity is applied when a
comparable values. [CONCEPT: Unit of Measurement] business’s financial information is recorded and reported
Delgado Web Services will record all business activities separately from the owner’s personal financial informa-
using dollars as the unit of measurement. tion. [CONCEPT: Business Entity]
Accounting concepts are described throughout Delgado Web Services will be used throughout Part 1
this textbook. When an application of a concept first to illustrate the accounting concepts and procedures for
occurs, it is explained. When additional applications a service business organized as a proprietorship.
How Business Activities Change the Accounting Equation Lesson 1-2 11

Careers In Accounting
So You Want to Be an Accountant
Stephen Coburn/Shutterstock.com
M any high school students consider a career
in accounting. However, not many under-
stand the variety of positions that are available
in the field of accounting or the differences in Salary Range: Salaries in the broad field
the duties performed. The range of positions also of accounting range from $35,000 to over
comes with a range of educational and experi- $100,000.
ence requirements and a corresponding range of
Qualifications: Educational requirements
compensation.
range from a high school accounting course to
Many of the accounting-related job titles in a
a four-year degree and higher. Special certifica-
company can be arranged in a hierarchy based on
tions can be acquired, which usually increase
educational requirements and average salary. A
the salary received.
typical hierarchy is given below.
The higher the position on the chart, the higher Occupational Outlook: The projected
the level of education and experience required for growth in accounting positions varies, but
the position and the higher the level of compensa- many areas of accounting are expected to grow
tion. For example, at the top of the chart, by up to 19% by 2020.
a CEO (Chief Executive Officer) and a CFO Source: O*Net Online (http://www.onetonline.org).
(Chief Financial Officer) would typically earn
higher salaries than positions further down
on the chart in the same company. CEO
There are many accounting fields that are not
related to any one company. These include auditor,
forensic accountant, government accountant, and
©Milenny, iStock
accountants in education. Each of these areas has CFO
its own education and experience requirements.
Internal
Controller
Auditor
General
Tax Management International
Ledger
Accountant Accountant Accountant
Accountant
Bookkeeper
AP/AR Clerk Payroll Clerk

The Accounting Equation LO3
Assets Liabilities Owner’s Equity

Left side amount Right side amounts
$0 $0 $0
Delgado Web Services will own items such as cash and as a liability. (2) Equity of the owner. Michael Delgado
supplies that will be used to conduct daily operations. owns Delgado Web Services and invests in the assets of
Anything of value that is owned is known as an asset. the business. Therefore, he has the right to decide how
Assets have value because they can be used either to acquire the assets will be used. The amount remaining after the
other assets or to operate a business. For example, Delgado value of all liabilities is subtracted from the value of all
Web Services will use cash to buy supplies for the business. assets is called owner’s equity.
Delgado Web Services will then use the asset bought, sup- The relationship among assets, liabilities, and o wner’s
plies, to operate the web design service business. equity can be written as an equation. The equation
Financial rights to the assets of a business are called showing the relationship among assets, liabilities, and
equities. A business has two types of equities. (1) owner’s equity is called the accounting equation. The
Equity of those to whom money is owed. For example, accounting equation is most often stated as:
Delgado Web Services may buy some supplies and agree
Assets = Liabilities + Owner’s Equity
to pay for the supplies at a later date. The business from
which supplies are bought will have a right to some of The accounting equation must always be in balance.
Delgado Web Services’ assets until the business pays for The total of the amounts on the left side must always
the supplies. An amount owed by a business is known equal the total of the amounts on the right side.
THINK like an ACCOUNTANT
Budgeting the Business OPEN THE SPREADSHEET TLA_CH01

Provide Neil with answers to the
Plan following questions:
N eil Logan came to your office with the idea 1. Based on Neil’s estimates, would you suggest he
of starting a web hosting service. Having quit his job to start the business?
previously worked in a similar company located in 2. Determine to the nearest dollar what hourly bill-
another state, he believes there is a need for a local ing rate he would need to charge to replace his
web hosting business in your city. He believes this current salary.
business would enable him to quit his $50,000-a-
3. What if the market will not support a higher bill-
year job and “be his own boss.”
ing rate? Can Neil achieve his goal by obtaining
After providing you with expense estimates,
more customers?
Neil stated, “I believe I can effectively service 20
clients. Each site would require about 75 hours a 4. Can you think of a change in the worksheet that
year to design, including periodic upgrades. This could make your analysis easier?
©Dan Bachman, iStock
service would be billed to clients at $40 per hour.

Then I would also receive a $30 monthly hosting
fee.“

Receiving Cash LO4

Michael Delgado,
Cash Capital
Beginning Balances $0 $0 $0
Received cash from owner
as an investment 2,000 0 2,000
New Balances $2,000 $0 $2,000
Any time a business spends money, receives money, or given to an account is called an account title. Therefore,
owes money, it engages in a business activity. Whenever Cash is the account that summarizes all of the assets that
a business activity takes place, amounts in the account- are cash. Cash can include a bank checking account,
ing equation change. Accountants call any business savings accounts, and actual cash on hand that belongs
activity that changes assets, liabilities, or owner’s equity to the business.
a transaction. For example, paying cash for supplies is In the accounting equation above, the asset, Cash, is
a transaction. After each transaction, the accounting increased by $2,000.00. This increase is on the left side
equation must always remain in balance. of the equation. The difference between the increases
and decreases in an account is called the account
RECEIVED CASH INVESTMENT FROM OWNER balance. Before the owner’s investment, the account
In the accounting equation above, the Beginning balance of Cash was zero. After the owner’s investment,
Balances line shows zero balances for assets, liabilities, the account balance of Cash is $2,000.00.
and owner’s equity. The values are zero because the busi- An account used to summarize the owner’s equity
ness has not yet been started. To establish his new busi- in a business is called a capital account. The capital
ness, Michael invests $2,000.00 of personal money in account is an owner’s equity account. In the account-
his company. Delgado Web Services will only be con- ing equation shown above, the owner’s equity account,
cerned about the effect of this transaction on Delgado Michael Delgado, Capital, is increased by $2,000.00.
Web Services’ accounting records, not on Michael’s per- This increase is on the right side of the accounting equa-
sonal records. [CONCEPT: Business Entity] tion. Before the owner’s investment, the account bal-
ance of Michael Delgado, Capital was zero. After the
Transaction 1. January 2. Received cash from owner owner’s investment, the account balance of Michael
as an investment, $2,000.00. Delgado, Capital is $2,000.00.
As a result of receiving cash, the accounting equation
In the accounting equation shown above, the asset has changed. However, both sides changed by the same
Cash is increased by $2,000.00, the amount of cash amount. The $2,000.00 increase on the left side of the
received by the business. A record that summarizes equation equals the $2,000.00 increase on the right side
all the transactions pertaining to a single item in the of the equation. Therefore, the accounting equation is
accounting equation is called an account. The name still in balance.
The left side of the accounting equation

(assets) must always equal the right side
(liabilities plus owner’s equity).

Paying Cash
Prepaid Michael Delgado,
Cash Supplies Insurance Capital
Balances $2,000 $0 $2,000
Paid cash for supplies 165 165
New Balances $1,835 $165 $0 $2,000
Paid cash for insurance 900 900
New Balances $935 $165 $900 $0 $2,000
PAID CASH FOR SUPPLIES PAID CASH FOR INSURANCE

Delgado Web Services needs supplies to operate the Delgado Web Services has business insurance that
business. Michael Delgado uses some of the business’s protects the business from losses due to accidents
cash to buy supplies. that might destroy the leased equipment or business
Transaction 2. January 2. Paid cash for supplies, Transaction 3. January 3. Paid cash for insurance,
$165.00. $900.00.
In this transaction, two asset accounts are changed. records and contracts. Whenever a business buys insur-
One asset, Cash, has been exchanged for another ance, the coverage is paid for in advance. Insurance
asset, Supplies. Supplies are considered an asset premiums are an asset because they have value until
because they are of value until they are used. The asset they expire. Delgado Web Services pays a $900.00
account, Cash, is decreased by $165.00, the amount insurance premium for insurance protection.
of cash paid out. This decrease is on the left side of the This payment gives Delgado Web Services insurance
accounting equation. The asset account, Supplies, is coverage for the length of the policy. Because insurance
increased by $165.00, the amount of supplies bought. premiums are paid in advance, they are referred to as
This increase is also on the left side of the accounting prepaid. The premiums (payments) are recorded in an
equation. asset account titled Prepaid Insurance.
For this transaction, two asset accounts are This transaction is very much like the previous one in
changed. The two changes are both on the left side that two assets are changed. One asset, Cash, has been
of the equation. When changes are made on only one exchanged for another asset, Prepaid Insurance. The
side of the equation, the equation must still be in bal- asset account, Cash, is decreased by $900.00, the amount
ance. Therefore, if one account is increased, another of cash paid out. The asset account, Prepaid Insurance,
account on the same side of the equation must be is increased by $900.00, the amount of insurance bought.
decreased. After this transaction, the new account bal- After this transaction, the new account balance of
ance of Cash is $1,835.00. The new account balance Cash is $935.00. The new account balance of Prepaid
of Supplies is $165.00. The sum of the amounts on Insurance is $900.00. The sum of the amounts on the
the left side is $2,000.00 (Cash $1,835.00 + Supplies left side is $2,000.00 (Cash, $935.00 + Supplies,
$165.00). The amount on the right side remains at $165.00 + Prepaid Insurance, $900.00). The amount
$2,000.00. Therefore, the accounting equation is still on the right side remains at $2,000.00. Therefore, the
in balance. accounting equation is still in balance.

Transactions on Account LO5
Assets 5 Liabilities 1 Owner’s Equity
Accts. Pay.—
Prepaid Canyon Office Michael Delgado,
Cash Supplies Insurance Supplies Capital
Balances $935 $165 $900 $0 $2,000
Bought supplies on account 220 220
New Balances $935 $385 $900 $220 $2,000
Paid cash on account 100 100
New Balances $835 $385 $900 $120 $2,000
BOUGHT SUPPLIES ON ACCOUNT on the right side is also $2,220.00 (Accounts Payable—
Delgado Web Services needs to buy additional supplies. Canyon Office Supplies, $220.00 + Michael Delgado,
The supplies are obtained from Canyon Office Supplies. Capital, $2.000.00). Therefore, the accounting equation
Rather than paying with cash, Delgado Web Services is still in balance.
arranges to buy with credit and pay at the end of the
month. It is a common practice to buy items and pay PAID CASH ON ACCOUNT
for them at a future date, which is referred to as buying
Canyon Office Supplies has allowed Delgado Web
on account. Buying on account is an arrangement made
Services to buy on account. However, since it is a new
between two businesses that allows a business to buy
business, Canyon Office Supplies has requested that
now and pay later. Buying on account is not the same as
Delgado Web Services send a check for $100.00 imme-
buying with a major credit card.
diately. Delgado Web Services will pay the remaining
portion of this liability at a later date.
Transaction 4. January 5. Bought supplies on account
from Canyon Office Supplies, $220.00.
Transaction 5. January 9. Paid cash on account to
Canyon Office Supplies, $100.00.
In this transaction, one asset and one liability are
changed. The asset account, Supplies, is increased by
$220.00, the amount of supplies bought. A person or In this transaction, one asset and one liability are
business to whom a liability is owed is called a c reditor. changed. The asset account, Cash, is decreased by
Delgado Web Services now owes Canyon Office Supplies $100.00, the amount of cash paid out. After this payment,
$220.00. This means that Canyon Office Supplies has Delgado Web Services owes less money to Canyon Office
a claim against Delgado Web Services’ assets until the Supplies. Therefore, the liability account, Accounts
debt is paid. Therefore, Canyon Office Supplies could Payable—Canyon Office Supplies, is decreased by
legally force Delgado Web Services to pay with some $100.00, the amount paid on account.
of its assets. The word “payable” refers to a liability After this transaction, the new account balance of
that promises a future payment. The liability account Cash is $835.00. The new account balance of Accounts
titled Accounts Payable—Canyon Office Supplies is Payable—Canyon Office Supplies is $120.00. The sum
increased by $220.00, the amount owed for the supplies. of the amounts on the left side of the accounting equation
After this transaction, the new account balance is $2,120.00 (Cash, $835.00 + Supplies, $385.00 +
of Supplies is $385.00. The new account balance Prepaid Insurance, $900.00). The sum of the amounts on
of Accounts Payable—Canyon Office Supplies is the right side of the accounting equation is also $2,120.00
$220.00. The sum of the amounts on the left side is (Accounts Payable—Canyon Office Supplies, $120.00
$2,220.00 (Cash, $935.00 + Supplies, $385.00 + + Michael Delgado, Capital, $2,000.00). Therefore, the
Prepaid Insurance, $900.00). The sum of the amounts accounting equation is still in balance.

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[256]Ib., p. 165.
[257]“Modern Abyssinia,” p. 224.
[258]Compare, e.g., his remark on p. 223, “They have any
amount of pluck,” with Parkyns’s comments quoted on p. 24 of
this book.
[259]E.g. p. 222.
[260]Ib., p. 216.
[261]Eyre and Spottiswoode.
[262]Cf. p. 308.
[263]Mr. Wylde describes the Ras as “by far the cleverest and
most enlightened man that the country possesses.” He is a
possible successor to the Abyssinian throne.
[264]Colonel Rochfort’s Report.
APPENDIX
Abyssinia is a deeply interesting country from the point of view of

geographical distribution, and it is much to be regretted that Dr. A. J.
Hayes did not have the opportunity of collecting insects on a large
scale. The animals of the southern half of Arabia are Ethiopian in
character; but in the Abyssinian mountains we may expect to find,
and we do find, a certain amount of Oriental affinity.
The valuable little collection of insects made by Dr. Hayes has
been presented by him to the Hope Department of the Oxford
University Museum, where the specimens can be seen and studied
by every naturalist interested in the great problems of distribution.
The attention of the donor was directed to the Oxford Museum by Mr.
W. L. S. Loat, who has himself contributed a large amount of
valuable material. Dr. Hayes’ collection was made, in February 1903,
in the vicinity of Lake Tsana, at a height of about 6500 feet. A
complete list is furnished below. Dr. Dixey has kindly determined and
made remarks upon the Pierinae.
LEPIDOPTERA.
NYMPHALIDAE.
Danainae: Limnas chrysippus (Linn.) ♀. The ground
colour of the pale tint characteristic of
1
Oriental specimens and usually replaced by
a much darker shade in African.
Danainae: L. chrysippus (Linn.) var. alcippus (Cram.) ♂♂.
2
Typical.
Nymphalinae: 1 Neptis agatha (Cram.).
1 Precis cebrene (Trim.).
PAPILIONIDAE.
Pierinae: 1 Catopsilia florella (Fabr.) ♂.
2 Colias electra (Linn.) ♂ ♀.
Terias brigitta (Cram.) ♂ ♂ ♀.
3
Dry season forms; not extreme.
3 Eronia leda (Boisd.) ♂ ♀ ♀.
One of these females has an orange apical
patch on the forewing, almost as distinct as
that of the male.
1 Pinacopteryx sp. ?
A female, rather worn; simulating Mylothris
agathina ♀.
Probably a new species, but being in poor
condition and a single specimen it would not
be advisable to describe it.
1 Belenois severina (Cram.) ♀. Dry season form.
1 Phrissura sp. ♂.
A male, of the P. sylvia group. This form of
Phrissura has not previously been recorded
from any part of East Africa.
Papilioninae: 8 Papilio demodocus (Esp.).
HYMENOPTERA.
1 Dorylus fimbriatus (Shuck.) ♂.
COLEOPTERA.
LAMELLICORNIA.
Scarabaeidae: Oniticellus inaequalis (Reiche).
1
Only known from Abyssinia.
Cetoniidae: 1 Pachnoda abyssinica (Blanch.).
1 Pachnoda stehelini (Schaum).
Both Abyssinian species.
PHYTOPHAGA.
Cassididae: 1 Aspidomorpha punctata (Fab.).
HETEROMERA.
Cantharidae: 2 Mylabris, probably a new species.
NEUROPTERA.
1 Nemoptera, probably a new species.
ORTHOPTERA.
Acridiidae: 1 Cyrtacanthacris
sp.
1 Phymateus brunneri? (Bolivar).
1 Phymateus leprosus (Fab.).
1 Petasia anchoreta (Bolivar).
Mantidae: 1 Sphodromantis bioculata (Burm.).
1 Chiropus aestuans? (Sauss.).
In addition to the above, Dr. Hayes presented three insects
captured by him at Gedaref in the Soudan, including a pair of a
magnificent new species of Buprestid beetle of the genus
Sternocera, taken in coitu. This species has recently been described,
from Dr. Hayes’ specimen and two others in the British Museum, by
Mr. C. O. Waterhouse, who has given it the name Sternocera druryi
(“Ann. Mag. Nat. Hist.” Oct., 1904, p. 247). The third insect is an
example of a Cantharid beetle, which does great damage to the
crops at Gadarif. Its determination as Mylabris hybrida (Bohem.) is
therefore a matter of some importance.
THE END
PRINTED BY WILLIAM CLOWES AND SONS, LIMITED, LONDON AND BECCLES.

THE
ANGLO-EGYPTIAN SUDAN
By permission of the Egyptian London: Smith, Elder Stanford’s Geogl. Estabt.,

Government. & Co. London.
(Large-size)
LAKE TSANA
By permission of the London: Stanford’s

Egyptian Smith, Elder Geogl. Estabt.,
Government. & Co. London.
(Large-size)
Transcriber's note:
pg 70 (footnote 41) Changed: Abyssinnia and its people to: Abyssinia

pg 91-92 (footnote 61) Changed: equitidœ to: equitidæ
pg 91-92 (footnote 61) Changed: nectariniœ to: nectariniæ
pg 96 Changed: plently of fish to: plenty
pg 271 Changed: been complied by to: compiled
pg 293 Changed: general langour to: languor
pg 311 (footnote 262) Changed: Cp. to: Cf.
Minor punctuation changes have been done silently.
Spelling inconsistencies have been left unchanged.
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eTextbook 978-1305947771 Century 21

Accounting: General Journal, Copyright

eTextbook 978-0133451863 Advanced Accounting

eTextbook 978-0134127620 Financial Accounting

eTextbook 978-1259673498 Managerial Accounting + 15th

eTextbook 978-0132675055 Construction Accounting &

eTextbook 978-1259222139 Financial Accounting 9th

eTextbook 978-0078025884 Accounting Information Systems

eTextbook 978-0073511245 General Organic & Biological

eTextbook 978-1259565403 Fundamentals of Cost

16-1 Preparing an Income Statement 472

An Accounting Cycle for a Corporation: Journalizing and Reinforcement Activity 3—Part B

Accounting for Accruals, Deferrals, and Reversing

21-1 Accruals 648

23-1 Forming a Partnership 722 24-1 Recording International Sales 752

Appendix A: Accounting Concepts A-1 English Glossary G-1

Input from educators, accounting professionals, content experts,

The Century 21 Accounting program provides students with a

The organization ensures clear student understanding. Students start with a

The step-by-step instructional approach clearly reinforces text

“The tagging of the

The lesson structure consists of three to five lessons per chapter

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Critical THinking Activities

Excel templates are provided for

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Forensic Accounting presents criminal investigations involving fraud,

Careers in Accounting, designed to encourage students to think

Accounting in the Real World: fascinating

Simulation 1: Red Carpet Events

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Cindy Anderson Rosemary Hemsell Matthew H. Pohlman

Carolyn Holt Balis Dana R. Hurda Sherilyn Reynolds

Doris Curry Joseph Kramer Martha Scarberry

Chapter 1 Starting a Proprietorship:

Chapter 2 Analyzing Transactions

Chapter 3 Journalizing Transactions

Chapter 4 Posting to a General

Chapter 5 Cash Control Systems

Chapter 6 Work Sheet and Adjusting

Chapter 7 Financial Statements for a

Chapter 8 Recording Closing Entries

2 Part 1 Accounting for a Service Business Organized as a Proprietorship

Part 1 to illustrate the accounting Balance Sheet Accounts Income Statement

Accounting for a Service Business Organized as a Proprietorship Part 1 3

LO1 Describe the different users

between expenses and

4 Chapter 1 Starting a Proprietorship: Changes That Affect the Accounting Equation

H ave you ever thought about owning your own

America was built on the hard work of entrepreneurs as

Starting a Proprietorship: Changes that Affect the Accounting Equation Chapter 1 5

1-1 Accounting in Action

LO1 Describe the different users of accounting information.

The Role of Accounting LO1

Assets Liabilities Owner’s Equity

Assets Liabilities Owner’s Equity