1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-1 The Accounting Equation

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 1-1 Activating Strategy (1) Name some companies organized as a proprietorship – one owner (2) Name some assets (things) owned by the school 2 LESSON 1-1

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 1-1 Notes Accounting Language of business Planning, recording, analyzing, and interpreting financial data Accounting System A process in which to provide and share financial information to all users (owner(s), customers, investors, managers, creditors or suppliers) Financial Statements Reports stating the financial condition of a business 3 LESSON 1-1

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 1-1 Notes continued Service business Provides a service for a fee Proprietorship or Sole Proprietorship One owner TechKnow Consulting, owner Kim Park BUSINESS ENTITY CONCEPT Keep personal and business records separate *LOOK at Pg 7 Business Structures – Forming and Dissolving a Proprietorship 4 LESSON 1-1

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 1-1 Notes Continued Assets – any item of value owned by a business Equities – financial rights to the assets of a business Liabilities – amount owed to creditors Owner’s Equity – amount remaining after subtracting what is owed from the value of assets (net worth) Equation must always be in balance (left side=right side)

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Notes continued 6 LESSON 1-1 Business Ethics-using the principle of right and wrong in making business decisions Ethics-principle of right and wrong

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 1-1 TERMS REVIEW accounting accounting system accounting records financial statements service business proprietorship asset equities liability owner’s equity accounting equation ethics business ethics page 9