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Section 3.1
Financial Claims in
Accounting
Property and
Financial Claims
The Accounting Equation
A L OE
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Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
business transaction account accounts receivable accounts payable investment on account
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Business Transactions
Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Buying a sweater or putting cash in your savings account are examples of business transactions.
business transaction
An economic event that causes a change —either an increase or decrease —in assets, liabilities, and/or owner’s equity.
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Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Business Transactions
Accounts receivable
A business records changes in subdivisions called accounts.
Accounts payable
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A subdivision under assets, liabilities, or owner’s equity.
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Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Business Transactions
Accounts payable
A business records changes in subdivisions called accounts.
Accounts receivable
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The amount owed, or payable, to the creditors of a business.
accounts receivable
The total amount of money owed to a business —money to be received later because of the sale of goods or services on credit.
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Assets
Cash in Bank
Accounts Receivable
Computer Equip
Office Equip
Delivery Equip
Liabilities
Accounts Payable
Owner’s Equity
Crista Vargas, Capital
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Glencoe Accounting

Business Transactions
Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Steps for analyzing a business transaction
3
4
Make sure the accounting equation remains in balance.
Determine the amount of increase or decrease for each account affected.
2 Classify the accounts affected.
1 Identify the accounts affected.
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Transactions and the
Accounting Equation
Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Assets
Cash in Bank
Office Equipment
Computer Equipment
Delivery Equipment
Liabilities
Accounts Payable
Owner’s Equity
Crista Vargas, Capital
Business Transaction 1
Christa Vargas took $25,000 from personal savings and deposited that amount to open a business checking account in the name Zip Delivery Service.
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Transactions and the
Accounting Equation
Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Assets
Cash in Bank
Office Equipment
Computer Equipment
Delivery Equipment
Liabilities
Accounts Payable
Owner’s Equity
Crista Vargas, Capital
Business Transaction 2
Christa Vargas transferred two telephones valued at $200 each from her home to the business.
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When an owner pays out cash or property in order to produce a profit.
See page 58
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Transactions and the
Accounting Equation
Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Assets
Cash in Bank
Office Equipment
Computer Equipment
Delivery Equipment
Liabilities
Accounts Payable
Owner’s Equity
Crista Vargas, Capital
Business Transaction 2
Christa Vargas transferred two telephones valued at $200 each from her home to the business.
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See page 58
Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Transactions and the
Accounting Equation
Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Assets
Cash in Bank
Office Equipment
Computer Equipment
Delivery Equipment
Liabilities
Accounts Payable
Owner’s Equity
Crista Vargas, Capital
Business Transaction 3
Zip issued a $3,000 check to purchase a computer system.
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Glencoe Accounting
See page 59
Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Transactions and the
Accounting Equation
Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Assets
Cash in Bank
Office Equipment
Computer Equipment
Delivery Equipment
Liabilities
Accounts Payable
Owner’s Equity
Crista Vargas, Capital
Business Transaction 4
Zip bought a used truck on account from Coast to Coast Auto for $12,000.
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When a business buys (or sells) an item on credit.
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Transactions and the
Accounting Equation
Section 3.2
Transaction That Affect Owner’s
Investment, Cash, and Credit
Assets
Cash in Bank
Office Equipment
Computer Equipment
Delivery Equipment
Liabilities
Accounts Payable
Owner’s Equity
Crista Vargas, Capital
Business Transaction 4
Zip bought a used truck on account from Coast to Coast Auto for $12,000.
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Glencoe Accounting
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Glencoe Accounting
Assignment
Complete Problems on back of notes sheet
Go to Page 62 of the textbook
Do:
• Math for Accounting
(1&2 and the lower three)
• Problem 3-2
(1-6)
Connect – Complete Ch 3 Sec 2 Problems
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