LESSON 1-1
Using Accounting
Principles and Records
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
Chapter 1 Objectives
Recording Departmental Purchases and
Cash Payments
2
After studying Chapter 1, you will be able to:
1. Define accounting terms related to departmental purchases
and cash payments.
2. Identify accounting concepts and practices related to
departmental purchases and cash payments.
3. Journalize and post departmental purchases and purchases
returns.
4. Journalize and post departmental cash payments.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 1-1
3
Using Accounting Principles and Records
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asset: anything of value that is owned
liability: an amount owed by a business
equities: financial rights to the assets of a business
owners’ equity: the amount remaining after the
value of all liabilities is subtracted from the value of
all assets
 stockholders’ equity: the owners’ equity in a
corporation
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 1-1
4
Using Accounting Principles and Records
 accounting equation: an equation showing the
relationship among assets, liabilities, and owners’
equity
 source documents: original business papers from
which information about business transactions is
obtained
 double-entry accounting: the recording of debit and
credit parts of a transaction
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 1-1
5
Using Accounting Principles and Records
 journal: a form for recording transactions in
chronological order
 special journal: a journal used to record only one
kind of transaction
 account: a record summarizing all the information
pertaining to a single item in the accounting equation
 ledger: a group of accounts
 general ledger: a ledger that contains all accounts
needed to prepare financial statements
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 1-1
6
Using Accounting Principles and Records
 subsidiary ledger: a ledger that is summarized in a
single ledger account
 controlling account: an account in a general ledger
that summarizes all accounts in a subsidiary ledger
 file maintenance: the procedure for arranging
accounts in a general ledger, assigning account
numbers, and keeping records current
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 1-1
7
ACCOUNTING EQUATION
page 7
The Accounting Equation
Assets
= Liabilities + Owners’ Equity
The Accounting Equation
(LEFT side of equation)
Assets
(RIGHT side of equation)
= Liabilities + Owners’ Equity
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 1-1
8
GENERAL JOURNAL
Assets
=
page 8
Liabilities + Owners’ Equity
Left side
Right side
T Account
DEBIT
(Left side)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
CREDIT
(Right side)
LESSON 1-1
9
NORMAL BALANCES OF ACCOUNTS
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 9
LESSON 1-1
10
LEDGERS
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 10
LESSON 1-1
11
DEFINE TERMS REVIEW
In Quizlet
page 11
Create: Chapter 1 AdvAcc (you will be adding 1-2 and 1-3 terms to this)
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asset
liability
equities
owners’ equity
stockholders’ equity
accounting equation
source documents
double-entry accounting
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journal
special journal
account
ledger
general ledger
subsidiary ledger
controlling account
file maintenance
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 1-1
12
Exit Ticket for today:
Audit Your Understanding 1-1
In a Word Document, SaveAS: Chapter1-1AYUYourName
And drop in my Inbox today!
1. How is the accounting equation most commonly
stated?
2. What is the normal balance of an asset account? A
revenue account?
3. What are the three needs met by Ztech’s account
numbering system?
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 1-1
13
Complete the following assignments for
Chapter 1-1 today
 Define Terms Review on page 11.
 Answer Audit Your Understanding questions on page
11.
 Complete Work Together 1-1 on Aplia – page 11
 Complete On Your Own 1-1 on Aplia – page 11
 Complete Application Problem 1-1 on Aplia – page
26.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 1-1