ACC 221 1st Edition Lecture 1 Outline of Current Lecture Chapter 1 Assets Liabilities and owner s equity Accounting Formula Additional Facts o Assets Liability Owner s Equity o Additional Facts About Accounting Cycle Current Lecture Chapter 1 Assets Liabilities Owner s equity Assets Liabilities and Owner s Equity o Assets Something that is owned and will provide future benefit Total of the stuff Increase Decrease Rules Amount placed on left side of account Dr balance increases Amount placed on right side of account Cr balance decreases Normal balance Debit balance Beginning balance 0 in Dr side o Liabilities Claims of the non owners to the stuff Increase Decrease Rules Amount placed on left side of account Dr balance decreases Amount placed on Right side of account Cr balance increases Normal Balance Credit Balance Beginning balance 0 in Cr Side o Owner s Equity Claims of the owners to the stuff Increase Decrease Rules Amount placed on left side of account Dr balance decreases Amount placed on Right side of account Cr balance increases Normal Balance Credit Balance Beginning balance 0 in Cr Side Accounting Formula Additional Facts o Assets Liabilities Owner s Equity Creates the balance sheet of the organization What we want to know start business with your sister How much of the money is in account at any given time How much of the money is mine How much of the money is my sister s These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Non owners Liabilities cannot remove money from the account only owners o Additional facts about accounting cycle Total assets must ALWAYS equal total liabilities owner s equity Liability accounts keep track of non owner s claim to assets Equity accounts keep track of owner s claim to assets Debit side for all accounts is on the left credit side for all accounts is on the right Only positive numbers are used in the accounting system The general ledger lists all individual transactions the trial balance equals only the ending balances for each account Accounts are shaped like a T referred to as T Accounts
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