0
Introduction to Accounting 120 Mr. Binet / Moncton High School Class #8: The Balance Sheet
<ul><li>You will be introduced the marvel that is… The Balance Sheet! </li></ul><ul><li>We will have a chance to examine w...
<ul><li>Financial position is the monetary value of an individual or company. To determine the financial position of a com...
<ul><li>Can you determine what an asset is compared to a liability ? </li></ul><ul><ul><li>Cash </li></ul></ul><ul><ul><li...
<ul><li>Total assets minus total liabilities equal owner's equity. This relationship is known as  the Fundamental Accounti...
 
<ul><li>Using the fundamental accounting equation, let's determine the financial position of Samantha Palmer, a student. T...
<ul><li>Step Two: List Liabilities </li></ul><ul><li>Step Three:  Using the Fundamental Accounting Equation to determine N...
<ul><li>Samantha's owner's equity or net worth is  $4 738.00 .  </li></ul>Samantha’s Financial Position
<ul><li>The total monetary value of assets and the total monetary value of liabilities change on a daily basis. This has a...
<ul><li>Now assume assets increased by $10 000 and liabilities decreased by $2 000.  What happens to the financial positio...
<ul><li>Now assume assets increased by $10 000 and liabilities decreased by $2 000.  What happens to the financial positio...
<ul><li>Go to the O: drive and in the “BINET” folder find assignment #1. Open it, and immediately “SAVE AS” on to your “U”...
Upcoming SlideShare
Loading in...5
×

Acct120 Class #8 The Balance Sheet

1,301

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,301
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
13
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Acct120 Class #8 The Balance Sheet"

  1. 1. Introduction to Accounting 120 Mr. Binet / Moncton High School Class #8: The Balance Sheet
  2. 2. <ul><li>You will be introduced the marvel that is… The Balance Sheet! </li></ul><ul><li>We will have a chance to examine what is your “networth”. </li></ul><ul><li>We will have some practice with identifying what liabilities and assets are in an assignment. </li></ul>In Today’s Class…
  3. 3. <ul><li>Financial position is the monetary value of an individual or company. To determine the financial position of a company or an individual, simply: </li></ul><ul><ul><li>Determine Assets: Assets are things that are owned and have value. An example of an asset is: Computer $3 500.00. </li></ul></ul><ul><ul><li>Determine Liabilities: Liabilities are debts, also known as, claims against the assets. An example of a liability is: Bank Loan $1 500.00. </li></ul></ul><ul><ul><li>Determine Owner's Equity: Determine the difference between the total assets and total liabilities. Owner's Equity is also referred to as Capital, Equity or Net Worth. </li></ul></ul>Financial Position
  4. 4. <ul><li>Can you determine what an asset is compared to a liability ? </li></ul><ul><ul><li>Cash </li></ul></ul><ul><ul><li>Bicycle </li></ul></ul><ul><ul><li>Mortgage </li></ul></ul><ul><ul><li>House </li></ul></ul><ul><ul><li>Bank Loan </li></ul></ul><ul><ul><li>Stereo </li></ul></ul><ul><ul><li>IOU to Friend </li></ul></ul>Financial Position
  5. 5. <ul><li>Total assets minus total liabilities equal owner's equity. This relationship is known as the Fundamental Accounting Equation: </li></ul><ul><ul><li>A - L = OE Assets - Liabilities = Owner's Equity </li></ul></ul><ul><li>The equation may also be stated as: </li></ul><ul><ul><li>A = L + OE Assets = Liabilities + Owner's Equity </li></ul></ul><ul><li>The fundamental accounting equation is the basis of accounting theory. </li></ul>The Fundamental Accounting Equation
  6. 7. <ul><li>Using the fundamental accounting equation, let's determine the financial position of Samantha Palmer, a student. The following is a list of her assets and liabilities. </li></ul><ul><li>Step One: List and total assets: </li></ul>Samantha’s Financial Position
  7. 8. <ul><li>Step Two: List Liabilities </li></ul><ul><li>Step Three: Using the Fundamental Accounting Equation to determine Net Worth (A – L = OE)… </li></ul>Samantha’s Financial Position
  8. 9. <ul><li>Samantha's owner's equity or net worth is $4 738.00 . </li></ul>Samantha’s Financial Position
  9. 10. <ul><li>The total monetary value of assets and the total monetary value of liabilities change on a daily basis. This has a direct effect on the monetary value of the owner's equity. The fundamental accounting equation allows us to analyze these changes. Review the following example, demonstrating changes: </li></ul><ul><li>Suppose the fundamental accounting equation is: </li></ul><ul><li>Assets ($80 000) - Liabilities ($25 000) = Owner's Equity ($55 000) </li></ul>Changes to the Fundamental Accounting Equation
  10. 11. <ul><li>Now assume assets increased by $10 000 and liabilities decreased by $2 000. What happens to the financial position? </li></ul><ul><li>Assets ($80 000+$10 000) - Liabilities ($25 000 - $2 000) = Owner's Equity (?) </li></ul><ul><li>Assets ($90 000) - Liabilities ($23 000) = Owner's Equity ($67 000) Now assume assets increased by $8 000 and owner's equity decreased by $5 000. What happens to the financial position? </li></ul><ul><li>Assets ($90 000 + $8 000) - Liabilities (?) = Owner's Equity ($67 000 - $5 000) </li></ul><ul><li>Assets ($98 000) - Liabilities ($36 000) = Owner's Equity ($62 000) </li></ul>Changes to the Fundamental Accounting Equation
  11. 12. <ul><li>Now assume assets increased by $10 000 and liabilities decreased by $2 000. What happens to the financial position? </li></ul><ul><li>Assets ($80 000+$10 000) - Liabilities ($25 000 - $2 000) = Owner's Equity (?) </li></ul><ul><li>Assets ($90 000) - Liabilities ($23 000) = Owner's Equity ($67 000) Now assume assets increased by $8 000 and owner's equity decreased by $5 000. What happens to the financial position? </li></ul><ul><li>Assets ($90 000 + $8 000) - Liabilities (?) = Owner's Equity ($67 000 - $5 000) </li></ul><ul><li>Assets ($98 000) - Liabilities ($36 000) = Owner's Equity ($62 000) </li></ul>Changes to the Fundamental Accounting Equation
  12. 13. <ul><li>Go to the O: drive and in the “BINET” folder find assignment #1. Open it, and immediately “SAVE AS” on to your “U” drive. </li></ul><ul><li>Go ahead and complete (individually) the assignment. </li></ul><ul><li>Take your time and go over it slowly, this is a basis for the rest of the course! </li></ul><ul><li>Login to your email ( https://exchange.nbss.nbed.nb.ca ). </li></ul><ul><li>When you are finished, submit the assignment to me via e-mail ( [email_address] ) with the subject “Unit 2, Assignment 1”. </li></ul>Accounting Equation Assignment
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×