Professional Documents
Culture Documents
Financial Accounting
Financial Accounting
1-1
Chapter 1
Accounting in Action
Slide
1-3
What is Accounting?
(2) organization to
Slide
1-4 SO 1 Explain what accounting is.
What is Accounting?
Illustration 1-1
The activities of the
Three Activities accounting process
Slide
1-5 SO 1 Explain what accounting is.
What is Accounting?
Creditors
Marketing Regulatory
Agencies
Investors
Slide
1-6 SO 2 Identify the users and uses of accounting.
What is Accounting?
Common Questions Asked User
1. Can we afford to give our
employees a pay raise? Human Resources
2. Did the company earn a
satisfactory income? Investors
3. Should any product lines be
eliminated? Management
4. Is cash sufficient to pay
dividends to shareholders? Finance
5. What price for our product will
maximize net income? Marketing
6. Will the company be able to
pay its debts? Creditors
Slide
1-7 SO 2 Identify the users and uses of accounting.
The Basic Accounting Equation
Slide
1-8 SO 6 State the accounting equation, and define its components.
The Basic Accounting Equation
Assets
Resources a business owns.
Provide future services or benefits.
Cash, Inventory, Equipment, etc.
Slide
1-9 SO 6 State the accounting equation, and define its components.
The Basic Accounting Equation
Liabilities
Claims against assets (debts and obligations).
Creditors - party to whom money is owed.
Accounts payable, Notes payable, etc.
Slide
1-10 SO 6 State the accounting equation, and define its components.
The Basic Accounting Equation
Equity
Ownership claim on total assets.
Referred to as residual equity.
Share capital and retained earnings.
Slide
1-11 SO 6 State the accounting equation, and define its components.
The Basic Accounting Equation
Illustration 1-7
Revenues result from business activities entered into for the purpose
of earning income.
Generally results from selling merchandise, performing services,
renting property, and lending money.
Slide
1-12 SO 6 State the accounting equation, and define its components.
The Basic Accounting Equation
Illustration 1-7
Slide
1-13 SO 6 State the accounting equation, and define its components.
The Basic Accounting Equation
Illustration 1-7
Slide
1-14 SO 6 State the accounting equation, and define its components.
The Basic Accounting Equation
Solution on
Slide
1-15
notes page SO 6 State the accounting equation, and define its components.
Using The Accounting Equation
Slide
1-16 SO 7 Analyze the effects of business transactions on the accounting equation.
Using The Accounting Equation
Purchase product
Event Pay rent.
computer. design with
customer.
Record/
Don’t Record
Slide
1-17 SO 7 Analyze the effects of business transactions on the accounting equation.
Using The Accounting Equation
Transaction Analysis
Slide
1-18 SO 7 Analyze the effects of business transactions on the accounting equation.