Introduction to Accounting I
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INTRODUCTION TO ACCOUNTING
GENERAL INFORMATION FOR COMPLETING THE CLASS
The following is a summary of the twelve chapters that you will be completing this semester. Be sure that
you are taking the time to read and STUDY each chapter. It is important to go through each of the
examples in the book and to complete the Review Quiz. Spending time reading and understanding before
you start the homework assignment will help you to complete in the exercises and case problems with
more understanding. Please ask questions to clarify questions that you may have on any assignment or
concept. Be sure to check your answers in the notebooks before turning in your assignments. There are
PowerPoint slides on the “I” drive that you may want to review before taking your exams or as
reinforcement to your reading.
The Nature of Accounting
Accounting is the process of recording, summarizing, analyzing, and interpreting financial (money-
related) activities to permit individuals and organizations to make informed judgments and decisions.
By law all businesses must keep accounting records. Decisions are based on accounting information for
profit and non-profit companies alike.
There are different forms of business organizations:
o Private business—object is to earn a profit
o Sole Proprietorship—owned by one person
o Partnership—co-owned by two or more persons
o Corporation—owned by investors called stockholders (The business—not the owners—are
responsible for the company’s obligations.)
There are different types of business organizations:
• Service business—doctors, lawyers, barber shop, etc.
• Merchandising business—purchases goods for resale
• Manufacturing business—produces a product to sell
THE ELEMENTS OF ACCOUNTING
Assets are items with money value that are owned by a business. Some examples are: cash, accounts
receivable (selling goods or services on credit), equipment (office, store, delivery, et