Analyzing Transactions: The Accounting Equation
- LO1 Define the accounting elements.
- LO2 Construct the accounting equation.
- LO3 Analyze business transactions.
- LO4 Show the effects of business transactions on the accounting equation.
- LO5 Prepare and describe the purposes of a simple income statement, statement of owner’s equity, and balance sheet.
- LO6 Define the three basic phases of the accounting process.
ORDER OF EVENTS TODAY (homework if not completed in class):
- Study the Demonstration Problem on pages 36-38–together
- Do the Self-Study Test Questions on pages 40-41 and check your work with the answers on page 49
- Do the Mastery Problem on page 48 by creating an Excel spreadsheet or using the working papers (get them from your teacher)
- Do Managing Your Writing on page 47 by creating a memo in Word using a template.
Extra Credit Learning Activities
- Talk with the manager of a small business to identify the types of expenses in the business.
- Identify the difference between the six different types of accounts. Classifying accounts correctly in these early chapters is a must. Give numerous examples of the types of accounts. Know the difference between an asset and an expense. Explain the difference between Accounts Payable and Accounts Receivable. Explain the effect of a “payment on account” by the business and by a customer.
Extra Credit Critical Thinking Activity
Mark Hahn invested $26,000 in cash to open a law office on April 28 of the current year. On April 29, he purchased office equipment for $10,800. He paid cash for all but $1,550 of the office equipment. On April 30, Mark paid $1,200 for six months’ insurance for his law practice. mark wants to know his financial condition of the business as of April 30.