A system of recording information about a business.  Lucas Pacioli (1494)

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Presentation transcript:

A system of recording information about a business.  Lucas Pacioli (1494)

Accountant/bookkeeper… ◦ collects documentation ◦ records this information ◦ categorizes it ◦ presents it in specific formats  Bookkeepers - data collection & entry.  Accountants - preparing financial statements, advisory or consulting role.

a possession of a business that will bring the business benefits in the future. Asset: a possession of a business that will bring the business benefits in the future. Asset Test 1.DOES A BUSINESS OWN/CONTROL IT? 2.WILL IT BRING A BUSINESS BENEFITS IN THE FUTURE? 3.CAN YOU VALUE IT ACCURATELY?

a debt (money owed) of the business. Liability: a debt (money owed) of the business. Results in assets (usually cash) leaving the business in the future. Examples…Loan Creditors (payables)

the value of the business to the owner(s) Owner’s Equity: the value of the business to the owner(s) Owner’s Equity = value of all the assets –liabilities.