1. Miss Savige

2.  Any thing in RED write down in your books please

3.  General understanding of accounting and the language of business  Knowledge and understanding of the five types of account classification. Asset Liability Income Expenses Equity

4.  What do you think accounting is?  Bank statements  Profit  Tax  Business  Financial statements  Management  Partnership  The process or work of keeping financial accounts

5.  The language of business.  A means to communicate financial information.  A way to convey information about a business to users.

6.  The production of information about an enterprise and the transmission of that information from people who have it to those who need It. – (Intermediate Accounting, 2nd edition )  The information system that measures business activity, process the data into reports and communicates the results to decision makers. – (accounting 6 th edition)

8.  Individuals  Businesses (managers, owners)  Investors  Creditors  Governments  Tax authorities  Non-profit organisations  Others….

9.  Individuals  manage bank accounts  Evaluate jobs  Decide whether they can afford something (e.g. a car  Businesses  Set goals  Budgeting  Investors  Whether to invest or not  How much they will get in return if they invest  Creditors (e.g. Banks)  If a company can make the loan repayments  Report on predicted income

10.  Governments  For making decisions regarding welfare  Tax authorities  Tax is calculated using accounting information  How much business have purchased and sold  Non-profit organisations  The same way business do  Others. (employees, unions, etc.)  Estimate wages  Decipher business profit  Influence potential decisions

11.  write down two examples of who uses accounting  write an example of how you used accounting within this month  People who use accounting to manage bank accounts are ________?  Budgeting for products is used by ________ ? Why?

12.  Accounting is based on 5 basic account types Asset Liability Owners Equity Income/revenue Expenses

13.  An asset is a resource that a business/ person/ government owns and is expected to benefit them in the future.  something that is of a benefit  Examples?

14.  Cash at bank  Accounts receivable (paid by credit)  Bills receivable (paid by certain date)  Inventories (stock)  Prepaid expenses  Land  buildings

15.  Current assets Assets that can be converted into cash or sold within the next 12 months  Land  Property  Non-current assets Assets that are not current assets.  Equipment that is needed for the company to run

16.  Economic obligations (debts) payable to an individual or an organisation outside the business  A responsibility or an obligation of arising from past transactions or events.  Examples?

17.  Accounts payable (opposite of accounts receivable)  Bills payable (opposite of bills receivable)  Accrued liabilities (sometimes called accrued expense) Interest, salary

18.  Demonstrate knowledge and understanding of assets, liabilities, owners equity and the accounting equation. Reminder  Any thing in RED write down in your books please

19. Accounts payable Something that the company has paid for by credit and not cash Bills payable Unpaid bills Accounts receivable A sale that was paid for by credit and the company is yet to receive the payment e.g. cash Bills receivable An invoice has been sent out and a company is waiting for the payment

20.  Accrued– to accumulate - (benefit or sum of money) - received by someone in regular or increasing amounts  Accrued Liability is an expense that has been acquired but not yet paid in cash. (has not been paid therefore it is owed) Wages – an employee has done the work but you haven't paid them yet. Interest – the interest is continually rising but the company does not pay it until the end of the month

21.  What the business is worth  Owners equity is the difference between the assets and the liabilities of a business and equals the amount of the owners investment in the business  What an owner invests in the company  Owners equity = Assets – Liabilities  Examples?

22.  Capital – What an owner invest in a company (money, land, buildings)  Drawings – what an owner removes from the company  Revenues (income)  Expenses Covered further down

23.  Classify each of the following as assets, liabilities or Owners equity  Accounts payable  Loan from bank  Owners interest in the business  Furniture  Money owed by Jack  Cash at bank  Stock / inventory  Rent – that you have to pay  Salaries

24.  Assets = Liabilities + owners equity  A = L + OE  The accounting equation  Owners equity = Assets – Liabilities  OE = A – L  Liabilities = Assets - Owners equity L = A - OE

25.  OE = A - L  John Smith the owner of the tuckshop wants to know his investment in the business. Use the above equation to work out the total value.  Cash at bank$ 500  Loan from PNC comity$ 200  Accounts payable $ 50  Accounts Receivable $ 70  Value of stock $ 80  Value of fridge $ 200

26.  Assets  Cash at bank $ 500  Accounts Receivable +$ 70  Value of stock +$ 80  Value of fridge +$ 200 =$ 850  Loan from PNC comity $ 200  Accounts payable +$ 50 =$ 250 Answer $ 600

27.  A = L + OE  John Smith the owner of the tuckshop wants to know the value of the assets. Use the accounting equation to work out the total value.  Amount owed to jack $100  Cost of bread $ 20  Loan from PNC$300  Amount owing by Ms Schmidt$ 10  New fridge monthly repayment $ 50  John smiths Investment $ 500

28.  Demonstrate knowledge and understanding of income/revenue and expenses as well as how assets, liabilities and owners equity, work in the accounting equation. Reminder  Any thing in RED write down in your books please

29.  Total assets must always equal total liabilities plus owners equity 1. If the owner puts $20,000 in a business where does that money go (what account does it go into)? 2. If the business buys furniture on credit what type of account is being used? (WRITE DOWN WHAT YOU THINK THE ANSWERS ARE)

30. 1. The money goes into cash at bank Equal reaction on the other side 2. Created a liability but also gained an asset Created liability through buying something on credit Gained an asset through obtaining furniture

31.  John Smith the owner of the tuckshop wants to know the value of the assets. Use the accounting equation to work out the missing asset value.  Amount owed to jack $100  Cost of bread $ 20  Loan from PNC$300  Amount owing by Ms Schmidt$ 10  New fridge monthly repayment $ 50  John smiths Investment $ 500

32.  The total amount of all revenues and other gains received in an accounting period.  Can enhance an asset can decrease a liability  (does not include money put in by the owner)  Increase the economic benefit  Examples?

33.  Demonstrate knowledge and understanding of income/revenue and expenses as well as how assets, liabilities and owners equity, work in the accounting equation. Reminder  Any thing in RED write down in your books please

34.  The result of decreasing asset or increasing liabilities is called an expense. An expense occurs from the cost of delivering services to clients.  Decreases economic benefit  Does not include distributions of equity participants

35.  Office rent  Salaries for employees  Advertising  Water, electricity gas  insurance  Supplies (used)  Cash expenses  Depreciation } ONLY BECOME EXPENSES WHEN PAID

36.  The devaluing of something E.g. Apple Iphone 3 cheaper now because over time more advance products have came out E.g. Wear an tear, a brand new car as soon as it is use is worth less than it was originally  The result of decreasing an asset or increasing liabilities is called an expense. An expense occurs from the cost of delivering services to clients.

37. The Basic Accounting Elements: Asset  Something a business owns or controls that is of benefit. Liability  Obligation to settle debts in the future Owners’ Equity  Owners’ interest in the company Revenue/Income  Operations of the company that increase assets and economic resources Expense  Decrease in economic resources and assets.

38.  If John Smith has the following assets and liabilities what is the owners equity  Cash at Bank$ 1,000  Loan from bank$ 4,000  Accounts payable$ 500  Accounts receivable $ 8,000  Inventories$ 2,000  Furniture$ 3,500

39. Assets - Liabilities= Owners equity Cash at bank Loan from bank $1,000$4,000 Accounts receivable Accounts payable $8,000$ 500 Inventories $2,000 Furniture $3,500 Total $14,500-$4,500=$10,000

40.  John Smith gives you the following list of items. Use the accounting equation to determine the total value of assets  Money owing to Tim $ 1,000  Value of stock $ 8,000  Loan from bank $ 1,000  Amount owing from Jack $ 1,000  New Equipment $ 3,000  Vehicle's value $15,000  John Smiths investment $25,000 Accounts payable? Accounts receivable? Prepaid rent? Company Car? Paid for food? Received money for services? Owner took money out? Paid employees Income? Tax owing? Drawings? Cash at bank? Paid for new stock? Capital? Interest earned? E L R/I A OE Consider using excel

41.  John Smith gives you the following list of items. Use the accounting equation to determine the total value of assets  Money owing to Tim $ 1,000  Value of stock $ 8,000  Loan from bank $ 1,000  Amount owing from Jack $ 1,000  New Equipment $ 3,000  Vehicle's value $15,000  John Smiths investment $25,000 Accounts payable? Accounts receivable? Prepaid rent? Company Car? Paid for food? Received money for services? Owner took money out? Paid employees Income? Tax owing? Drawings? Cash at bank? Paid for new stock? Capital? Interest earned? E L R/I A OE L

42.  Assets = $. ? ? ? ? ? ? ? ? ? ? ? ? ? ?

43.  Assets = $27,000. L A A A E R/I OE E L A E R/I

44.  Fill in the blank  Capital is what an owner.. in a company.  Drawings is what an owner.. from the company L  Accounting is.. (please circle)  Income/revenue Increases theTF economic benefit  Expenses Increases the economic benefit TF  Owners equity is the difference between the.. and the.. of a business and equals the amount of the.. Investment in the business

45.  Two examples of an Asset. 1. 2.  Two examples of a Liability.1. 2.  Two examples of Owners equity.1. 2.  Two examples of an Expense1. 2.  Two examples of Income/revenue1. 2.  What is the Accounting equation?..  Fill in the Blank. An asset is something a business.. or controls that is of.. (please circle)  Is budgeting in accounting? T F  Accounts are the only people who use accounting T F  Non Current assets are sold within 12 months. T F  I owe John Smith money, that is an assetT F  Accounts payable is the opposite of accounts receivable T F  Owners equity = Assets + Liabilities T F  Liabilities = Assets - Owners equity T F  Total assets must always equal total liabilities plus T F owners equity

46.  Demonstrate knowledge and understanding of revenue and expenses as well as how assets, liabilities and owners equity, work in the accounting equation.  Demonstrate knowledge and understanding of who uses accounting Reminder  Any thing in RED write down in your books please

48.  Individuals  Businesses  Investors  Creditors  Governments  Tax authorities  Non-profit organisations  Others. (employees, unions, etc.)  manage bank accounts  Evaluate jobs  Decide whether they can afford something (e.g. a car)  Set goals  Budgeting  Whether to invest or not  How much they will get in return if they invest  If a company can make the loan repayments  Report on predicted income  For making decisions regarding welfare  Tax is calculated using accounting information  How much business have purchased and sold  The same way business do  Estimate wages  Decipher business profit  Influences for potential decisions

49. Assets owners equity liabilities

50.  Show three ways the accounting equation can be expressed (write them down)  A = L + OE  OE = A – L  L = A - OE

51. 1. Write out the appropriate equation 2. Decipher which classification it is asking for 3. List values under the equation 4. Work out totals 5. Work out missing value

52.  If John Smith has the following assets and liabilities what is the owners equity  Cash at Bank$ 2,000  Bank Loan$ 3,500  Accounts payable$ 600  Accounts receivable $ 7,100  Inventories$ 3,000  Furniture$ 1,700  Land$ 8,000  Interest Payable $ 200

53. Owners Equity = Assets-Liabilities Cash at BankBank Loan $ 2,000 $ 3,500 Accounts receivable Accounts payable $ 600 $ 7,100 Inventories Interest Payable $ 3,000 $ 200 Furniture $ 1,700 Land $ 8,000 Totals $15, 300-$10,800 = $ 4500

54.  John Smith gives you the following list of items. Use the accounting equation to determine the total value of assets  Money owing to Tim $ 2,000  Value of stock $ 8,000  Loan from bank $ 1,500  Amount owing from Jack $ 3,500  New Equipment value $ 4,500  Vehicle's value $14,500  John Smiths investment $29,000 Company Car? Accounts receivable? Accounts payable? Owner took money out? Cash at bank? Received money for services? Interest earned? Paid employees Income? Tax owing? Drawings? Prepaid rent? Paid for new stock? Paid for food? Capital? E L R/I A OE L

55.  Assets = $. Company Car? Accounts receivable? Accounts payable? Owner took money out? Cash at bank? Received money for services? Interest earned? Paid employees Income? Tax owing? Drawings? Prepaid rent? Paid for new stock? Paid for food? Capital?

56.  Assets = $ 32,500. Company CarA Accounts receivableA Accounts payableL Owner took money outOE Cash at bankA Received money for servicesR/I Interest earnedR/I Paid employees IncomeE Tax owingL DrawingsOE Prepaid rentA Paid for new stockE Paid for foodE CapitalOE

57.  John Smith invest $20,000 into the business, Cupcake World as capital. Cupcake World also takes out a loan from the bank for $20,000. With the $40,000 the business buys $10,000 worth of inventories, $5,000 of furniture, a $15,000 motor vehicle and leaves the remaining money in the bank.  Make to following table in excel  Fill out the values  Work out totals We are using excel to solve this problem!

59.  Fill in the blank  Capital is what an owner.. in a company.  Drawings is what an owner.. from the company L (please circle)  Income/revenue Increases the economic benefit T F  Expenses Increases the economic benefit T F  Accounts are the only people who use accounting T F  Owners equity is the difference between the.. and the.. of a business and equals the amount of the.. Investment in the business

60.  Three examples of an Asset. 1. 2. 3.  Three examples of a Liability. 1. 2. 3.  Two examples of Owners equity. 1. 2.  Three examples of an Expense 1. 2. 3.  Three examples of Income/revenue 1. 2. 3.  What is the Accounting equation?..  Fill in the Blank. An asset is something a business.. or controls that is of.. (please circle)  Is budgeting in accounting? T F  Non Current assets are sold within 12 months. T F  I owe John Smith money, that is an asset T F  Accounts payable is the opposite of accounts receivable T F  Owners equity = Assets + Liabilities T F  Liabilities = Assets - Owners equity T F  Total assets must always equal total liabilities plus T F owners equity

61.  Knowledge and understanding of debit and credit and how they affect different accounts.

62.  Debit” and “Credit” are just accounting- terms for “increase” and “decrease”.  Both debit and credit can cause an increase or a decrease  Debit is always on the left credit is always on the right whether its in a bank statement, ledger or balance sheet.  A ledger is A book or other collection of financial accounts of a particular type

63.  Debit card – spending your own money  Credit card – spending someone else's money e.g. Spending the banks money

64.  Debits either increase a debit account or decrease a credit account.  Assets and Expenses are increased by debit  Liabilities, owners equity and revenue are decreased by a debit  For example, a debit entry in a ledger may record an increase in an asset, an expense, or a decrease in a liability.

65.  Credits either increase a credit account or decrease a debit account.  Liabilities, owners equity and revenue are increased by a credit  Assets and Expenses are decreased by credit  For example, a credit entry may record an decrease in an asset, an increase in a liability, or a revenue or profit.

66.  DEAD – Debits increase Expenses, Assets and Dividend Dividends are a sum of money paid regularly by a company to its shareholders out of its profits Dividends are considered an expense as a company has to pay money to its shareholders  CORAL – Credits increase Owners equity, Revenue And Liabilities  Equity isn't an expense dividends how to explain?

67. Debit Assetsexpenses Credit liabilitiesrevenueOwners equity  To increase an Asset or Expense: Debit  To increase a Liability, Revenue, or Owners’ Equity: Credit  To decrease an Asset or Expense: Credit  To decrease a Liability, Revenue, or Owners’ Equity: Debit