FINISH:

Chapter 2

Analyzing Transactions: The Accounting Equation

 Learning Objectives

  • 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):

  1. Study the Demonstration Problem on pages 36-38–together
  2. Do the Self-Study Test Questions on pages 40-41 and check your work with the answers on page 49
  3. Do the Mastery Problem on page 48 by creating an Excel spreadsheet or using the working papers (get them from your teacher)
  4. Do Managing Your Writing on page 47 by creating a memo in Word using a template.

Extra Credit Learning Activities

  1. Talk with the manager of a small business to identify the types of expenses in the business.
  2. 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.