1. The Accounting equation
Chapter 2

2. The three basic accounting elements
Assets
Liabilities
Owner’s Equity

3. Accounting equation A = L + OE
Money and things of value = where the money came from to buy them OR
Money and stuff that can be turned into money = who has claims against that money

4. Exercises – page 42 (#1, 2)

5. (a) Investment by owner

6. (b) Purchase of an asset for cash

7. (c) Purchase of an asset on account

8. (d) Payment on a loan

9. Exercises – page 42 (#3)

10. Revenues, expenses, and withdrawals

11. (E) Delivery revenues earned in cash

12. (F) Paid rent for month

13. (g) Paid phone bill

14. (h) Delivery revenues earned on account

15. (i) Purchase of supplies for cash

16. (j) Payment of insurance premium

17. (k) Cash receipts from prior sale on account

18. (l) Purchase of an asset on account making a partial payment

19. (m) Payment of wages

20. (n) Deliveries made for cash and on account

21. (o) Withdrawal of cash from business

22. Exercises – page 43 (#4)

23. Financial statements
Format:

24. Guidelines for financial statements

25. Income statement

26. Statement of owner’s equity

27. Balance sheet

28. Exercises – page 43 (#5)