Class Notes for College Accounting: A Practical Approach, 14th Edition
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1-1
Chapter 1
Accounting Concepts and Procedures
Chapter Overview
The chapter begins with an introduction to accounting and the organizational forms of business: sole
proprietorships, partnerships, corporations, and limited liability companies. Learning Unit 1-1 has assets,
liabilities, and equities defined and explained through examples and the accounting equation. Learning
Unit 1-2 illustrates the steps necessary to prepare a balance sheet. Learning Unit 1-3 expands the
accounting equation to include revenues, expenses, and withdrawals. Each element of the equation is
further defined. A variety of transactions are analyzed along with their impact on the accounting
equation. Learning Unit 1-4 discusses the income statement, the statement of owner’s equity, and the
balance sheet. The accounting equation is used to illustrate how the income statement, statement of
owner’s equity, balance sheet are developed and interrelated. The net income from the income statement
is carried to the statement of owner’s equity, and the ending capital is carried from the statement of
owner’s equity to the balance sheet. The demonstration problem and the solution tips help students
record the effect of transactions on the accounting equation and to ultimately prepare financial statements.
Learning Objectives
After studying Chapter 1, your students should gain proficiency in the following:
1. Explain Accounting, Business, and the Accounting Equation.
2. Prepare a Balance Sheet.
3. Record Transactions into the Expanded Accounting Equation.
4. Prepare the Three Financial Statements.
Chapter 1
Accounting Concepts and Procedures
Chapter Overview
The chapter begins with an introduction to accounting and the organizational forms of business: sole
proprietorships, partnerships, corporations, and limited liability companies. Learning Unit 1-1 has assets,
liabilities, and equities defined and explained through examples and the accounting equation. Learning
Unit 1-2 illustrates the steps necessary to prepare a balance sheet. Learning Unit 1-3 expands the
accounting equation to include revenues, expenses, and withdrawals. Each element of the equation is
further defined. A variety of transactions are analyzed along with their impact on the accounting
equation. Learning Unit 1-4 discusses the income statement, the statement of owner’s equity, and the
balance sheet. The accounting equation is used to illustrate how the income statement, statement of
owner’s equity, balance sheet are developed and interrelated. The net income from the income statement
is carried to the statement of owner’s equity, and the ending capital is carried from the statement of
owner’s equity to the balance sheet. The demonstration problem and the solution tips help students
record the effect of transactions on the accounting equation and to ultimately prepare financial statements.
Learning Objectives
After studying Chapter 1, your students should gain proficiency in the following:
1. Explain Accounting, Business, and the Accounting Equation.
2. Prepare a Balance Sheet.
3. Record Transactions into the Expanded Accounting Equation.
4. Prepare the Three Financial Statements.
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Subject
Accounting