1. Chapter 1 – Starting a Proprietorship
Accounting I
Chapter 1 – Starting a Proprietorship

2. TERMS REVIEW accounting accounting system accounting records
service business
proprietorship
asset
equities
liability
owner’s equity
accounting equation
Lesson 1-1, page 8

3. TERMS REVIEW Accounting
Planning, recording, analyzing, and interpreting financial information.
Lesson 1-1, page 4

4. TERMS REVIEW Accounting System
A planned process for providing financial information that will be useful to management.
Lesson 1-1, page 4

5. TERMS REVIEW Accounting Records
Organized summaries of a business’s financial activities.
Lesson 1-1, page 4

6. TERMS REVIEW Service Business
A business that performs an activity for a fee.
Lesson 1-1, page 6

7. TERMS REVIEW Proprietorship A business owned by one person.
Lesson 1-1, page 6

8. TERMS REVIEW Business Entity – Accounting Concept
Keeping the financial information of the business separate from the personal finances of the owner.
Lesson 1-1, page 6

9. TERMS REVIEW
Asset
Anything of value that is owned.
Lesson 1-1, page 7

10. TERMS REVIEW Equities Financial rights to the assets of a business.
Lesson 1-1, page 7

11. TERMS REVIEW Liability An amount owed by a business.
Lesson 1-1, page 7

12. TERMS REVIEW Owner’s Equity
The amount remaining after the value of all liabilities is subtracted from the value of all assets.
Lesson 1-1, page 7

13. TERMS REVIEW Accounting Equation
An equation showing the relationship among assets, liabilities, and owner’s equity.
Lesson 1-1, page 7

14. THE ACCOUNTING EQUATION
Lesson 1-1, page 7

15. Work Together &
On Your Own – Page 8

16. TERMS REVIEW transaction account account title account balance capital
Lesson 1-2, page 12

17. TERMS REVIEW Transaction
A business activity that changes assets, liabilities, or owner’s equity.
Lesson 1-2, page 9

18. TERMS REVIEW Unit of Measurement - Concept
Business transactions are stated in numbers that have common values (dollars)
Lesson 1-2, page 9

19. TERMS REVIEW
Account
A record summarizing all the information pertaining to a single item in the accounting equation.
Lesson 1-2, page 9

20. TERMS REVIEW Account Title The name given to an account.
Lesson 1-2, page 9

21. TERMS REVIEW Account Balance The amount in an account.
Lesson 1-2, page 9

22. TERMS REVIEW
Capital
The account used to summarize the owner’s equity in a business.
Lesson 1-2, page 9

23. RECEIVING CASH
Transaction 1 August 1. Received cash from owner an an investment, $10,
Lesson 1-2, page 9

24. Transaction 2 August 3. Paid cash for supplies, $1,577.00.
PAYING CASH
Transaction 2 August 3. Paid cash for supplies, $1,
Transaction 3 August 4. Paid cash for insurance, $1,
Lesson 1-2, page 10

25. 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,
Lesson 1-2, page 11

26. Work Together &
On Your Own – Page 12

27. TERMS REVIEW
balance sheet
Lesson 1-3, page 15

28. TERMS REVIEW Balance Sheet
A financial statement that reports assets, liabilities, and owner’s equity.
Lesson 1-3, page 13

29. TERMS REVIEW Going Concern - concept
Financial statements are prepared with the expectation that the business will remain in business indefinitely.
Lesson 1-3, page 13

30. PREPARING A BALANCE SHEET
1. Write the heading.
2. Prepare the assets section. 1
3. Prepare the liabilities section. 2 3 4
4. Prepare the owner’s equity section. 6 5 7 8
5. Add amounts and compare the totals.
6. Rule single lines.
7. Write the totals.
8. Rule double lines.
Lesson 1-3, page 14

31. Work Together &
On Your Own – Page 15