1.1 Accounting in Action

What is Accounting?

• Accounting provides financial information to users for making decisions

• Accounting is often referred to as the +

• Accounting is the process of planning, recording, analyzing, and +

Terms

• Accounting System – is a planned process designed to compile financial data and summarize the results in accounting records and reports

• Financial statements – financial reports that summarize the financial conditions and operations of a business

• Net Worth Statement – shows what a person owns and owes and is used for making credit lending decisions

• Asset – +

• Liability – +

Terms

• Equity – is the difference between assets and liabilities

• Accounting Equation – +

• Double underlines under a number means +

• Dollar signs are not always used

• Ethics – the principles of right and wrong that guide an individual in making decisions

• Business Ethics – principles used to make business decisions

Review

• What is Accounting

• Why is accounting called the language of business

• Describe a scenario in which you, as a non accountant, might us accounting

Work Together 1-1

• Megan finder, a recent college graduate, is applying for her first credit card. The creditor has asked for a personal net worth statement, Megan has $800.00 in her checking account and owns a scooter worth $2000. she owes Jaycee Auto $920 and River College $125. Complete a new worth statement for Megan Finder. Use the current date.

On Your Own 1-1

• Anthony clement is applying for a car loan. The leading institution requires a personal net worth statement. Anthony currently has $1085 in cash, and his camera is worth$635. He also owes Kelley Electronics $83 and Vista Travel $305. Complete a net worth statement for Anthony clement. Use the current date.

Assets

Total Assets

Liabilities

Total Liabilites

Net Worth