+ AIM Why is Accounting important to study if you want to work in business? DO NOW What is a good definition of Accounting?

+ Why is it important to study accounting, even if you don’t want to be an accountant?

+ THE ACCOUNTING PROFESSION Public Accountants Service to the general public through the services they perform. Private Accountants Individuals in companies involved in activities including cost and tax accounting, systems, and internal auditing. Not For Profit Accountants Reporting and control for government units, foundations, hospitals, labor unions, colleges/universities, and charities.

+ What about other jobs/professions that use accounting info? What are some other professions that use accounting information as an important part of their job? Work together to create a list, be ready to explain how that profession uses accounting info.

+ What is the difference between a service business and a manufacturing business? SERVICE MANUFACTURING

+ Service or Manufacturing? The Gap Glendale Medical Center Handy Man Ford Motor Company The Chase Manhattan Bank Michigan City Animal Hospital Prudential Insurance Company of America Bethlehem Steel Corporation

+ ProprietorshipPartnership Corporation Owned by two or more persons. Often retail and service-type businesses Generally unlimited personal liability Partnership agreement Ownership divided into shares of stock Separate legal entity organized under state corporation law Limited liability Forms of Business Ownership Generally owned by one person. Often small service-type businesses Owner receives any profits, suffers any losses, and is personally liable for all debts.

+ MUST ALWAYS BALANCE! AssetsAssetsLiabilitiesLiabilities Owners’ Equity = + The Basic Accounting Equation

+ AssetsAssetsLiabilitiesLiabilities Owners’ Equity = + Anything of value Resources a business owns. Provide future services or benefits. Cash, Supplies, Equipment, Prepaid Insurance, etc. AssetsAssets The Basic Accounting Equation

+ AssetsAssetsLiabilitiesLiabilities Owners’ Equity = + Amount owed by a business Claims against assets (debts and obligations). Creditors - parties to whom money is owed. Accounts payable, Notes payable etc. LiabilitiesLiabilities The Basic Accounting Equation

+ AssetsAssetsLiabilitiesLiabilities Owners’ Equity = + The amount remaining after the value of all liabilities is subtracted from the value of assets Ownership claim on total assets. Referred to as residual equity. Capital, Drawings, etc. (Proprietorship or Partnership). Owners’ Equity The Basic Accounting Equation

+ Asset or Liability/OE? Let’s see how much you have learned……

+ Create a list of accounts for yourself and their $ values. Assets Liabilities Owner’s Equity (Assets – Liabilities)

+ Practice Exercise Assets=Liabilities+Owner’s Equity $30,000$13,000 $60,000$20,000 $51,000$25,000