Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Property Property and Financial Claims Section 3.1 The purpose of accounting is to provide: Financial information about property Financial claim to property property Anything of value that a person or business owns. financial claim A legal right to property. Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Property Property and Financial Claims Section 3.1 Property = Financial Claims Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Property Property and Financial Claims Section 3.1 A creditor lends you money. You buy something on credit. The financial claim is shared. credit When you buy something and agree to pay for it later. creditor Any person or business to which you owe money. Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Property Property and Financial Claims Section 3.1 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Financial Claims in Accounting Property and Financial Claims Section 3.1 Assets Cash Office Equipment Manufacturing Equipment Buildings Land assets Property or items of value owned by a business. Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Financial Claims in Accounting Property and Financial Claims Section 3.1 Equity Owner’s Equity equity The accounting term for the financial claim to assets. owner’s equity The owner’s claim to the assets of a business. Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Financial Claims in Accounting Property and Financial Claims Section 3.1 The Accounting Equation liabilities Amounts owed to creditors; the claims of creditors to the assets of a business. Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Business Transactions business transaction An economic event that causes a change—either an increase or decrease—in assets, liabilities, and/or owner’s equity. Section 3.2 Buying a sweater or putting cash in your savings account are examples of business transactions. Transaction That Affect Owner’s Investment, Cash, and Credit Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Business Transactions Section 3.2 A business records changes in subdivisions called accounts. Accounts receivable Accounts payable account A subdivision under assets, liabilities, or owner’s equity. Transaction That Affect Owner’s Investment, Cash, and Credit Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Business Transactions A business records changes in subdivisions called accounts. Accounts receivable Accounts payable accounts receivable The total amount of money owed to a business—money to be received later because of the sale of goods or services on credit. accounts payable The amount owed, or payable, to the creditors of a business. Section 3.2 Transaction That Affect Owner’s Investment, Cash, and Credit Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Revenue and Expense Transactions Section 3.3 Examples of Revenue Fees earned for services performed Cash received from the sale of merchandise revenue Income earned from the sale of goods or services. Transaction That Affect Revenue, Expense, and Withdrawals by the Owner Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Revenue and Expense Transactions Section 3.3 Examples of Expenses Rent Utilities Advertising expense The cost of products or services used to operate a business. Transaction That Affect Revenue, Expense, and Withdrawals by the Owner Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Withdrawals by the Owner Section 3.3 Withdrawals decrease assets and owner’s equity. Investments increase assets and owner’s equity. withdrawal When the owner takes cash or other assets from the business for personal use. Transaction That Affect Revenue, Expense, and Withdrawals by the Owner Home