How Transactions Change Owner’s Equity in an Accounting Equation Lesson 1-3 3/31/2017 LESSON 1-3 Pages 14-18 How Transactions Change Owner’s Equity in an Accounting Equation Objectives  Define accounting terms related to starting a service business organized as a proprietorship and to changes that affect the accounting equation. Identify accounting concepts and practices related to starting a service business organized as a proprietorship and to changes that affect the accounting equation. Classify accounts as assets, liabilities, or owner’s equity and demonstrate their relationships in the accounting equation.  Analyze how transactions affect the accounts in an accounting equation. Are they Revenue, Expenses, or Withdrawals? Green

REVENUE TRANSACTIONS page 14 Transaction 6 August 12. Received cash from sales, $295.00. (Revenue) Transaction 7 August 12. Sold services on account to Oakdale School, $350.00. (Revenue) LESSON 1-3

EXPENSE TRANSACTIONS Transaction 8 August 12. Paid cash for rent, $300.00.(Expense) Transaction 9 August 12. Paid cash for telephone bill, $40.00. (Expense)

OTHER CASH TRANSACTIONS Lesson 1-3 3/31/2017 OTHER CASH TRANSACTIONS page 16 Transaction 10 August 18. Received cash on account from Oakdale School, $200.00. Transaction 11 August 18. Paid cash to owner for personal use, $125.00. (Withdrawal) LESSON 1-3 Green

Work together Text p. 17 Working Papers p. 9 Determining how transactions change an accounting equation. Write the answer to the following problem in the Working Papers. 1. Place a plus (+) in the appropriate column is increased. Place a minus (-) in the appropriate column if the account is decreased Trans. No. Assets = Liabilities + Owner’s Equity Cash + Accts. Rec + Supplies + Prepaid = Accts. Pay + Susan Sanders Bowman Co. Insurance Maxwell Co. Capital 1. 2. 3. 4. 5. + + 2. Sold services on account to Bowman Company (Revenue) 1. Received cash from sales (Revenue) 3. Paid cash for telephone bill (Expense) 5. Paid cash to owner for personal use (Withdrawal) 4. Received cash on account from Bowman Company + + - - + - - -

Work together 1-3 Text p. 17 Working Papers p. 10 Determining how transactions change an accounting equation. Write the answer to the following problem in the Working Papers. 1. Place a plus (+) in the appropriate column is increased. Place a minus (-) in the appropriate column if the account is decreased Trans. No. Assets = Liabilities + Owner’s Equity Cash + Accts. Rec + Supplies + Prepaid = Accts. Pay + Vincent Orr, Navarro Co. Insurance Barrett Co. Capital 1. 2. 3. 4. 5. + + 1. Sold services on account to Navarro Company (Revenue) 2. Received cash from sales (Revenue) 3. Received cash on account from Navarro Company 4. Paid cash to owner for personal use (Withdrawal) 5. Paid cash for rent (expense) + + + - - - - -

Assignment: TERMS REVIEW revenue sale on account expense withdrawals Lesson 1-3 3/31/2017 TERMS REVIEW revenue sale on account expense withdrawals Assignment: 1-3 Application Problem Textbook p. 20 Working Papers p.13 MAKE SURE YOU WRITE IN WHETHER IT IS A REVENUE, EXPENSE, AND WITHDRAWAL TRANSACTIONS CHANGE AN ACCOUNTING EQUATION. Homework: Finish pages: 1-4 (STUDY GUIDE) I will collect the study guide! Read pages: 14-18 Finish 1-3 Application Problem Green

1-3 APPLICATION PROBLEM Trans. No. LESSON 1-2 3/31/2017 1-3 APPLICATION PROBLEM Trans. No. Assets = Liabilities + Owner’s Equity Accts Pay Peter Accts. Rec. Prepaid Kline Smith Cash + Lisa Lee + Supplies + Insurance = Co. + Capital Beg. Bal 1. 625 375 300 200 1,100 2. 3. 4. 5. 6. 7. 8. New Bal. -300 -300 (expense) 325 375 300 200 800 -150 -150 (withdrawal) 175 375 300 200 650 +800 (revenue) +800 200 975 375 300 1,450 -100 -100 (expense) 875 375 300 200 1,350 +400 +400 (revenue) 875 400 375 300 200 1750 +650 (revenue) +650 1,525 400 375 300 200 2,400 -35 -35 (expense) 1,490 400 375 300 200 2,365 +300 -300 1,790 100 375 300 200 2,365