© 2014 Cengage Learning. All Rights Reserved. Do Now: ●Today you will learn about sales and its effect on Owner’s Equity ●Write down different payment

© 2014 Cengage Learning. All Rights Reserved.

Do Now:

● Today you will learn about sales and its effect on Owner’s Equity

● Write down different payment options you have when making a purchase● What is a transaction is and what are different

transactions a typical proprietorship may engage i?

● Take out homework for review

LO6

Lesson 1-3

SLIDE 1


Transactions Affecting Owner’s Equity

● An increase in equity resulting from the sale of goods or services is called revenue.● When cash is received from a sale, total amount of

both assets and owner’s equity is increased● A sale for which payment will be received at a

later date is called a sale on account.● Realization of Revenue: revenue recorded at time

goods or services are sold as opposed to when payment is made

LO6

Lesson 1-3

SLIDE 2


Transactions Affecting Owner’s EquityLO6

Transaction 7January 12. Sold services on account to Main Street Services, $500.00.

Transaction 6January 10. Received cash from sales, $1,100.00.

Lesson 1-3

SLIDE 3


Transactions Affecting Owner’s EquityLO6

Total of left side:$1,935 + $500 + $385 + $900 =

$3,720

Total of right side:

$120 + $3,600 = $3,720

Lesson 1-3

SLIDE 4


Expense Transactions

● Unlike a liability, which is an amount that is owed, the cost of goods or services used to operate a business is called an expense.● Telephone, internet, rent, advertising, and utilities

are common

LO7

Lesson 1-3

SLIDE 5


Expense TransactionsLO7Transaction 8

January 12. Paid cash for communications bill for cell phone and Internet service, $80.00.

Lesson 1-3

SLIDE 6


Expense TransactionsLO7Transaction 9

January 13. Paid cash for equipment rental, $400.00.

Lesson 1-3

SLIDE 7


Other Cash Transactions

● Assets taken from the business for the owner’s personal use are called withdrawals.● Decreases owner’s equity

Lesson 1-3

SLIDE 8


Other Cash Transactions

Transaction 11January 16. Michael Delgado withdrew equity in the form of cash, $350.00.

Transaction 10January 16. Received cash on account from Main Street Services, $200.00.

Lesson 1-3

SLIDE 9


Summary of Changes in Owner’s EquityTransaction

NumberKind of

TransactionChange in

Owner’s Equity6 Revenue (cash) +1,100.007 Revenue (on account) +500.008 Expense (communications) –80.009 Expense (equipment rental) –400.00

11 Withdrawal of equity –350.00Net change in owner’s equity +770.00

Lesson 1-3

SLIDE 10


Lesson 1-3 Audit Your Understanding

1. How is owner’s equity affected when cash is received from sales?

SLIDE 11

ANSWER

Owner’s equity is increased.

Lesson 1-3



2. How is owner’s equity affected when services are sold on account?

SLIDE 12

ANSWER

Owner’s equity is increased.

Lesson 1-3



3. How is owner’s equity affected when cash is paid for expenses?

SLIDE 13

ANSWER

Owner’s equity is decreased.

Lesson 1-3


Class Work

● 1-3 Work Together

● Individual Work: complete 1-3 OYO● Reciprocal Teaching: approach board to

demonstrate completion Application Problem 1-3 & Application Problem 1-4 (text pages 25, 26, & 27) at front of room

SLIDE 14


Review Game:

● Chapter 1 terms review game using SuperTeacher tools chapter 1 speed review game● Break up into 2 teams, with bells

● Team that wins receives 2 extra credit points on test

● Then begin Mastery Problem

SLIDE 15


Homework

● Finish Chapter 1 Mastery Problem● Complete Chapter 1 Challenge Problem● Complete Chapter 1 Crossword Puzzle

● Closure: How else can one record transactions besides using the accounting equation?

SLIDE 16


Fist of Five

● How comfortable are you with chapter 1 material?1. No idea2. Somewhat understand3. Comfortable4. Can test well with the information5. Can teach to peers

SLIDE 17


Do Now:

● Take out crossword puzzle, mastery problem and challenge problem and compare answers with classmates around you

● Parking Lot: Write Down any questions you have regarding Chapter 1● If you do not have any questions but, rather, answers, please

answer the questions on the front board for your fellow classmates

● Individually: draw a diagram of containing types of transactions that increase Owner’s Equity and types that decrease Owner’s Equity

SLIDE 18


Closure:

● Cross-Curricular Connections: Are there different types of spending you have? If so, what are they?

SLIDE 19

Documents

© 2014 Cengage Learning. All Rights Reserved. Do Now: ●Today you will learn about sales and its effect on Owner’s Equity ●Write down different payment