EXPLORING BUSINESS Unit 6: Accounting Part 1: Introduction to Accounting

Prepping you for the Next Step! CCRS Standards Math (28)-Solve word problems containing several rates, proportions, or percentages Math (33) - Draw conclusions based on a set of conditions English – (28)Understand implied or subtly stated cause-effect relationships in more challenging passages

Careers in Accounting Accountants are found in every field! –John Grisham (Author) – Undergraduate degree in Accounting –Arthur Blank (CPA) – Owner of Atlanta Falcons and co-founder of Home Depot –Phil Knight (CPA) – Founder and President of Nike Chairs of several Fortune 500 companies are CPA’s. –Thomas Pickard (CPA) - #2 Man at FBI. Nearly 1,400 of the FBI’s special agents are accountants

What is Accounting? : the process of recording and reporting financial events, or transactions. Every event or transaction having a financial impact on the business must be analyzed and recorded.

What is Accounting? Accounting is more than numbers. Accounting includes databases of your customers, your vendors, and your employees. Accounting will help you track your business and plan your future. –With proper accounting in business, you might discover sales trends, or learn that you can plan a month long sales trip! –Road Trip ExampleRoad Trip Example –

Why Accounting is Important Skills you will learn in Accounting Class: –Communication Skills –Pay Attention to Details –Improve Problem Solving Abilities –Evaluate Your Own Work –Interpret Data –Understand Basics of Business

Role of Accounting Often called “Language of Business” –It is a standard means of communicating financial information in a form that is clearly understood by everyone interested in the operations and financial condition of the business. –

Basis of Accounting Accounting consists of many rules and procedures. Each business sets up its accounting system according to specific needs. –ALL businesses follow the same basic rules and procedures. –GAAP: Generally Accepted Accounting Principles.

Why It Is Important! In any job or business you will need an understanding of accounting to make the right business decisions. By taking Accounting, you will benefit in ANY job – –Travel Agent, Business Owner, Lawyer, Nurse, Veterinarian, Construction Accounting Video

Careers in Accounting Public Accountant: provide financial services to clients on a fee basis. –CPA: Certified Public Accountant Must pass a rigorous examination. Managerial Accountant: expected to prepare and explain financial reports for a business. –Most earn undergraduate degree in Accounting. And pass CPA or CMA.

EXPLORING BUSINESS Unit 6: Accounting “The Accounting Equation”

ACCOUNTING CONCEPT Business Entity: A business owner must keep private and business expenses in different accounts.

THE ACCOUNTING EQUATION Assets = Liabilities + Owner’s Equity

ASSETS IN ACCOUNTING :Anything of value that is owned by a business. Examples include: –Cash –Supplies –Prepaid Insurance –Accounts Receivable Your customers that “Bought On Account”

LIABILITIES IN ACCOUNTING :an amount owed by a business Examples: –Accounts Payable You owe someone money, for purchasing goods and/or services.

OWNER’S EQUITY IN ACCOUNTING :the owner’s claims to the total assets of the business. Examples: –Mr. Fassl, Capital –Mr. Fassl, Withdrawals

Check Learning A A=L + OE $75,000 = L + $50,000 Liability=_________ owed yet B $218,000=$60,000 + OE OE= ___________

Exercise 2-1 pg 11 Smart Notebook