Notes

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Outline

1	BUSINESS TRANSACTIONS Introduction to Principles of Accounting
2	Accounting Equation Assets = Liabilities + Owners’Equity + Revenues - Expenses
3	KEY WORDS Keywords identify accounts Look for words from account titles
4	CA$H Paid Payment Check Deposit Cash
5	On Account Key words “on account” “billed”, or “invoice” mean either: Accounts Receivable (AR) OR Accounts Payable (AP)
6	Accounts Receivable (AR) or Accounts Payable (AP) If cash will be received use Accounts Receivable (AR) If cash will be paid use Accounts Payable (AP)
7	Consider the Following Transaction
8	CORRECT!
9	FEES EARNED
10	CORRECT!
11	Acme Pool Service billed a client $300 in fees earned for cleaning a pool.
12	CORRECT!
13	Click on the classification of Accounts Receivable (AR)”
14	CORRECT!
15	Consider the Following Transaction
16	CORRECT!
17	Click on the proper classification of “Cash”
18	CORRECT!
19	Acme Pool Service paid $200 for the monthly rent.
20	CORRECT!
21	Click on the proper classification of “Rent Expense”
22	CORRECT!
23	Consider the Following Transaction
24	Click on the proper classification of “Cash”
25	CORRECT!
26	Acme Pool Service collected payment of the amount previously billed for cleaning a pool.
27	CORRECT!
28	Click on the proper classification of “Accounts Receivable (AR)”
29	CORRECT!
30	Accounting Equation MUST Equal