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# Acct120 Class #9 The Account Form Balancing Sheet

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### Acct120 Class #9 The Account Form Balancing Sheet

1. 1. Introduction to Accounting 120 Mr. Binet / Moncton High School Class #8: The Balance Sheet
2. 2. <ul><li>Brief review from last class: Assets, Liabilities and Equity. </li></ul><ul><li>The Fundamental Accounting Equation. </li></ul><ul><li>Worksheet Assignment </li></ul><ul><li>The Account Form Balance Sheet </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>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
5. 5. <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
6. 6. <ul><li>A balance sheet is a report that illustrates the financial position of a person, business or organization. There are two formats for preparing a balance sheet: </li></ul><ul><ul><li>Account Form balance sheet: lists the assets in the left column and the liabilities and owner's equity in the right column. </li></ul></ul><ul><ul><li>Report Form balance sheet: The report form balance sheet will be introduced later. </li></ul></ul><ul><li>We will begin by learning how to create an account form balance sheet. </li></ul>The Account Form Balance Sheet
7. 7. Samantha Palmer’s Balance Sheet
8. 8. <ul><li>Notice the balance sheet is a formal representation of the fundamental accounting equation A = L + OE. </li></ul>The Account Form Balance Sheet
9. 9. <ul><li>Accounting is particular with formatting details. The following pages outline guidelines for properly preparing an account form balance sheet. </li></ul><ul><li>The balance sheet requires a three-line heading. The heading informs: </li></ul><ul><ul><li>Who? -The name of the individual, business or organization for which the information is prepared. What? -The name of the financial report. When? -The date the financial report was prepared. The date must be recorded in full (e.g. September 30, 2003). </li></ul></ul><ul><li>The heading is written one item per line and always in the same order: Who?-line 1, What?-line 2 and When?-line3. </li></ul><ul><li>The sub-headings Assets, Liabilities and Owner's Equity are underlined and centered in the appropriate column and row. </li></ul>Formatting Guidelines
10. 10. <ul><li>Go to the O: drive and in the “BINET” folder find Unit II, Assignment #2. 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 II, Assignment 2”. </li></ul>Assignment Time!