CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 1 LESSON 1-1 General Ledger Chart of Accounts – refer to it often (CofA) Acc’t for simplest form of business – missing some acc’ts that a merchandising business would have CofA is used to determine the classification of accounts In order for acc’t equation to equal business must know which account to charge Accounts can be added and deleted as necessary to classifications

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 1-1 Classifications 100 – Assets (own) 200 – Liabilities (owe) 300 – Owner’s Equity (what company is worth) 400 – Revenue (money in (Sales)) 500 – Expenses (money out)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 1-1 TERMS REVIEW accounting accounting system accounting records financial statements service business proprietorship page 9

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 1-1 THE ACCOUNTING EQUATION page 8

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 1-1 TERMS REVIEW Assets – owned; exchanged for money; used to acquire other assets or operate a business Equities – financial rights to the assets 1) whom money is owed and 2) owner Liability – business you owe money to owner’s equity – what business is worth if you sold it accounting equation – A = L + OE Ethics business ethics page 9

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 1-1 Work Together (WT) 1-1 – pg 9 (on paper) On Your Own (OYO) 1-1 – pg 9 (on paper)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-2 How Business Activities Change the Accounting Equation

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 1-1 TERMS REVIEW Transaction – business sold or bought something to affect the equation Account – see pg 3 (110, 120, 310, 540) account title – see pg 3 (Cash, Supplies, etc) account balance – the amount in an account Capital – used to summarize the worth of the business under owner's name page 13

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 1-1 RECEIVING CASH Transaction 1 August 1. Received cash from owner as an investment, $5, page 10

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 1-1 PAYING CASH Transaction 2 August 3. Paid cash for supplies, $ Transaction 3 August 4. Paid cash for insurance, $1, page 11

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 1-1 TRANSACTIONS ON ACCOUNT Transaction 4 August 7. Bought supplies on account from Supply Depot, $ Transaction 5 August 11. Paid cash on account to Supply Depot, $ page 12

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 1-1 WT 1-2 – pg 13 (on paper) OYO 1-2 – pg 13 (on paper)