1. How can values be expressed in multiple ways?
Unit Pricing
Accounting
Week 1
What basic math skills are necessary for success in accounting and finance?
How does one determine the appropriate mathematical to use for various business situation?
How can values be expressed in multiple ways?
How does one calculate the total amount due for a loan or a purchase?
What is Accounting?
What is the Accounting Equation?

2. The Accounting Equation

3. Doesn’t have to be paid off, could still be making payments
Assets
Liabilities
Owner’s Equity
Items OWNED by a business that will provide future benefits.
Probable future outflow of assets as a result of a past transaction or even.
Amount by which the business assets exceed the business liabilities.
Doesn’t have to be paid off, could still be making payments
In other words, debts or obligations of the business that can be paid with cash, goods, or services
“Net Worth” or “Capital”
CASH
MERCHANDISE
FURNITURE
FIXTURES
MACHINERY
BUILDINGS
LAND
Accounts Receivable
Once the debts are paid,
the remaining assets belong
to the owner (Owner’s Equity).
NOTES PAYABLE
ACCOUNTS PAYABLE

4. ANALYZING BUSINESS TRANSACTIONS
THREE QUESTIONS:
What Happened?
Which accounts are affected?
How is the Accounting Equation affected?

5. Purchased office supplies for $800
Let’s Analyze
Mary Adams Consulting
PURCHASED OFFICE SUPPLIES FOR $800 CASH
Question #1: What Happened?
Question #2: Identify Accounts that are Affected/Classify the Accounts
Question #3: Determine whether the accounts have increased or decreased. #3
Office Supplies Cash
Increased Decreased #1
Purchased office supplies for $800 #2
Office Supplies & Cash
Assets Assets

6. Let’s look at the accounting Equation+
ASSETS
LIAB. =
O. E. +
CASH
OFF. SUPPLIES = +
+$800
-$800 =
Right hand side
of equation is
not affected

7. RECEIVING CASH
Transaction 1 August 1. Received cash from owner as an investment, $10,

8. PAYING CASH
Transaction 2 August 3. Paid cash for supplies, $1,
Transaction 3 August 4. Paid cash for insurance, $1,

9. TRANSACTIONS ON ACCOUNT
Transaction 4 August 7. Bought supplies on account from Ling Music Supplies, $2,
Transaction 5 August 11. Paid cash on account to Ling Music Supplies, $1,