Grade 11 Accounting Principles (30S) A Course for Independent Study

Transcription

1 Grade 11 Accoutig Priciples (30S) A Course for Idepedet Study

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3 G RADE 11 ACCOUNTING P RINCIPLES (30S) A Course for Idepedet Study 010 Maitoba Educatio

4 Maitoba Educatio Cataloguig i Publicatio Data Grade 11 accoutig priciples (30S) : a course for idepedet study. ISBN-13: Accoutig Study ad teachig (Secodary).. Accoutig Programmed istructio. 3. Accoutig Study ad teachig (Secodary) Maitoba. I. Maitoba. Maitoba Educatio. 657 Copyright 010, the Govermet of Maitoba, represeted by the Miister of Educatio. Maitoba Educatio School Programs Divisio Wiipeg, Maitoba, Caada Every effort has bee made to ackowledge origial sources ad to comply with copyright law. If cases are idetified where this has ot bee doe, please otify Maitoba Educatio. Errors or omissios will be corrected i a future editio. Sicere thaks to the authors ad publishers who allowed their origial material to be used. Ay websites refereced i this documet are subject to chage.

5 C ONTENTS Module 1: Itroductio to Accoutig Priciples 1 Lesso 1: Itroductio 3 Lesso : The Accoutig Equatio 1 Lesso 3: The Balace Sheet 7 Lesso 4: Preparig a Balace Sheet 31 Lesso 5: Aalyzig Chages i the Accoutig Equatio 37 Lesso 6: Recordig Chages i Fiacial Positio 43 Lesso 7: Recordig Trasactios i T-Accouts 49 Lesso 8: Calculatig New Balaces i the Ledger 57 Lesso 9: Preparig a Trial Balace 61 Lesso 10: Preparig a Updated Balace Sheet After 67 Chages i Fiacial Positio Module 1 Learig Activity Aswer Keys 71 Module : The Icome Statemet I the Red or Black? 1 Overview 3 Lesso 1: Profit ad Loss 5 Lesso : Preparig a Icome Statemet 7 Lesso 3: Debit ad Credit Rules for Icome Statemet Accouts 13 Lesso 4: Recordig Reveue ad Expese Chages i the Accouts 3 Lesso 5: Preparig a Updated Trial Balace ad Icome Statemet 33 Lesso 6: Preparig Balace Sheets i Report Form 37 Module Learig Activity Aswer Keys 45 Cotets iii

6 Module 3: Jourals ad Ledgers Keepig Track of It All 1 Overview 3 Lesso 1: The Geeral Joural 5 Lesso : The Ledger ad Postig Procedures 11 Lesso 3: Subsidiary Ledgers 7 Module 3 Learig Activity Aswer Keys 43 Module 4: The Worksheet Sharpe Your Pecil! 1 Overview 3 Lesso 1: The Six-Colum Worksheet 5 Lesso : Preparig Fiacial Statemets from a Worksheet 11 Lesso 3: Aalyzig Fiacial Statemets 17 Lesso 4: Closig the Ledger 1 Lesso 5: Postig the Closig Etries to the Ledger 7 Lesso 6: Preparig a Post-Closig Trial Balace 31 Module 4 Learig Activity Aswer Keys 39 Module 5: Cash Cotrol Who s Got the Moey? 1 Overview 3 Lesso 1: Cotrol of Cash Receipts 5 Lesso : Sales ad Goods ad Services Tax 11 Lesso 3: Multicolum Joural 1 Lesso 4: Petty Cash 33 Lesso 5: Bakig at Fiacial Istitutios 39 Lesso 6: Bak Recociliatio 45 Module 5 Learig Activity Aswer Keys 61 iv Grade 11 Accoutig Priciples

7 Module 6: Merchadisig Busiess 1 Overview 3 Lesso 1: Merchadisig Busiess Icome Statemet 5 Lesso : Cost of Goods Sold 9 Module 6 Learig Activity Aswer Keys 5 Module 7: Payroll A Dollar Eared 1 Overview 3 Lesso 1: Itroductio to Payroll 5 Lesso : Payig Employees 15 Lesso 3: Payroll Deductios 19 Lesso 4: Payroll Register 7 Lesso 5: Payroll Liabilities ad Expeses 31 Module 7 Learig Activity Aswer Keys 39 Module 8: Icome Tax Your Fair Share 1 Overview 3 Lesso 1: Persoal Icome Tax 5 Lesso : Federal ad Provicial/Territorial Tax Rates 11 Lesso 3: Preparig a Persoal Icome Tax Retur Profile 1 1 Lesso 4: Preparig a Persoal Icome Tax Retur Profile 43 Module 8 Learig Activity Aswer Keys 63 Cotets v

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9 A CKNOWLEDGEMENTS Maitoba Educatio gratefully ackowledges the cotributios of the followig idividuals i the developmet of Grade 11 Accoutig Priciples (30S): A Course for Idepedet Study. Course Writer Cotet Reviewer Maitoba Educatio, Citizeship ad Youth Staff School Programs Divisio Eva Brow Busiess Educatio Teacher Peter Chudobiak Idepedet Cosultat Lee-Ila Bothe Coordiator Corie Jamault Desktop Publisher Gilles Ladry Project Maager Grat Moore Publicatios Editor Tom Pris Project Leader River East Collegiate River East Trascoa School Divisio Wiipeg Documet Productio Services Educatioal Resources Brach Documet Productio Services Educatioal Resources Brach Developmet Uit Istructio, Curriculum, ad Assessmet Brach Documet Productio Services Educatioal Resources Brach Learig Support ad Techology Uit Istructio, Curriculum, ad Assessmet Brach Ackowledgemets vii

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11 M ODULE 1 Itroductio to Accoutig Priciples This module cotais the followig lessos: Lesso 1: Itroductio Lesso : The Accoutig Equatio Lesso 3: The Balace Sheet Lesso 4: Preparig a Balace Sheet Lesso 5: Aalyzig Chages i the Accoutig Equatio Lesso 6: Recordig Chages i Fiacial Positio Lesso 7: Recordig Trasactios i T-Accouts Lesso 8: Calculatig New Balaces i the Ledger Lesso 9: Preparig a Trial Balace Lesso 10: Preparig a Updated Balace Sheet After Chages i Fiacial Positio

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13 L ESSON 1: INTRODUCTION Overview 1 hr Welcome to the first lesso of Grade 11 Accoutig Priciples. This lesso is a little differet from the other lessos i this course. You will ot be learig about accoutig; istead, you will be learig about how you will be completig the course. It s sort of like the first few days of school whe the teacher tells you about your course ad what you are goig to lear. What is Accoutig? Accoutig is sometimes called the laguage of busiess. It ivolves idetifyig, measurig, recordig, iterpretig ad commuicatig the results of busiess activities. It is used as a basis for cotrollig resources, determiig profits, ad measurig accomplishmets. The purpose of accoutig is to provide decisio makers with useful iformatio to assist them i makig busiess ad ecoomic decisios. Decisio makig is carried out by idividuals, busiesses, commuities, churches, ad govermets. Accoutig educatio provides a awareess of a wide variety of accoutig ad techology careers, ad lays the foudatio for cotiued study ad lifelog learig. As you work through Grade 11 Accoutig Priciples, you will develop the ability to uderstad ad use accoutig iformatio effectively. You will actively explore accoutig by usig computer applicatios. Computers i accoutig offer a excitig way to perform mathematical ad repetitive tasks, as well as the ability to quickly prepare accurate fiacial statemets. Each lesso begis with learig outcomes that measure the ew kowledge you will gai i the lesso. Explore the cocepts i each lesso further by collaboratig with your study parter, your peers, ad adults workig i the accoutig professio, as well as by searchig the Iteret. What Will You Lear? There are eight modules i this course. They are: Module 1: Accoutig Priciples A Balacig Act Module : The Icome Statemet I the Red or Black? Module 3: Jourals ad Ledgers Keepig Track of It All Module 1: Itroductio to Accoutig Priciples 3

14 Module 4: The Worksheet Sharpe Your Pecil Module 5: Cash Cotrol Who s Got the Moey? Module 6: Merchadisig Busiess Module 7: Payroll A Dollar Eared Module 8: Icome Tax Your Fair Share Followig most lessos, there are oe or more learig activities to test your kowledge ad uderstadig of the lesso material. It is importat that you complete all learig activities carefully to the best of your ability so that you ca develop as may skills as possible to become efficiet ad employable i the accoutig field. You are required to your assigmets to your tutor/marker, whose address was icluded with this course. At the same time, you will your assigmets to the Idepedet Study Optio at distace.learig@gov.mb.ca. Please refer to the Module ad Lesso Goal Chart for a listig of all learig activities ad assigmets. You will fid this chart at the ed of this lesso. How Will You Kow How You re Doig? You will kow how well you are learig by how well you complete the followig thigs: Midterm ad Fial Exams The course cotais a midterm exam ad a fial exam. You will be writig your midterm exam after Module 3 ad your fial exam after Module 8, the fial module i the course. You will be writig both of these exams uder supervisio. Both of these exams are worth 5% each, for a total of 50%. I order to write your exams, you will eed to apply for them. Here is how you ca do that. If you are attedig school, ask your school s Idepedet Study Optio (ISO) Facilitator to add your ame to the ISO exam eligibility list. Do this at least three weeks prior to the ext scheduled exam week. If you are ot attedig school, check the Examiatio Request Form for optios available to you. The Examiatio Request Form was mailed to you with this course. Fill i this form ad mail or fax it three weeks before you are ready to write the Fial Supervised Project. The address is: ISO 555 Mai St. Wikler, MB R6W 1C4 Fax: Phoe: Grade 11 Accoutig Priciples

15 Assigmets Each module i this course cotais at least oe assigmet that you will complete ad to your tutor/marker. All of these assigmets are worth a total of 50% of your fial grade. Assigmets provide the opportuity to develop aalytical, decisio-makig, commuicatio, ad accoutig skills. Assigmets should be cosidered as the cotracts of busiess, which i real life are highly competitive. This meas that you should do your very best to complete each assigmet as accurately ad attractively as possible. What are Learig Activities? Learig activities are activities that are ot assessed. I other words, you complete them ad check your aswers yourself (the aswer keys are foud at the ed of the module). You do ot learig activities to your tutor/marker. Make sure that you complete each learig activity, because doig so will help you to practice what you have leared ad prepare you to successfully complete your assigmets ad exams. What Will You Need? I order to complete this course, you will eed a computer with: a spreadsheet program like Excel (If you require spreadsheet iformatio, please see the otes i Appedix A at the back of this course.) a word processor like Word Iteret/ access Dowloadable Files Several times durig the course you will eed access to some files that ca be dowloaded from this website: < If you do ot have access to the Iteret, phoe the Idepedet Study Optio at ad a CD cotaiig the files will be set to you. Module 1: Itroductio to Accoutig Priciples 5

16 How Much Time Will You Need? Learig accoutig through idepedet study is a little differet tha learig it i the classroom. Oe of the advatages is that you are i charge of how you lear, ad you ca decide for yourself the pace at which you will complete the course. You do t have to wait for your teacher or classmates, ad you ca work as quickly or as slowly (withi limits) as you wat. You ca also complete as may lessos at a time as you wat. Read the ext few pages to get a idea of how to pace yourself. You will be spedig a miimum of 110 hours o this course. That meas at least 45 miutes per school day to complete the course i a regular school year, or at least 90 miutes daily i a semester. Take a look at the followig three charts ad decide which chart best describes the time of year that you wat to be coverig the course. Chart A: Semester 1 Here is a suggested timelie that you ca follow if you start your course i September ad eed to complete it by the ed of Jauary. Module Completio Date Module 1 September 15 Module September 30 Module 3 October 15 Module 4 October 31 Module 5 November 15 Module 6 November 30 Module 7 December 15 Module 8 Jauary 10 6 Grade 11 Accoutig Priciples

17 Chart B: Semester Here is a suggested timelie that you ca follow if you start your course i Jauary ad eed to complete it by Jue. Module Completio Date Module 1 February 15 Module February 30 Module 3 March 15 Module 4 March 31 Module 5 April 15 Module 6 April 30 Module 7 May 15 Module 8 May 31 Chart C: Full School Year (Not Semestered) Here is a suggested timelie that you ca follow if you have registered for this course i September ad would like to complete it by Jue. Module Completio Date Module 1 September 30 Module October 31 Module 3 November 30 Module 4 Jauary 31 Module 5 February 8 Module 6 March 31 Module 7 April 30 Module 8 May 31 Module 1: Itroductio to Accoutig Priciples 7

18 Do ot wait util the last miute to complete your work, sice your tutor/marker may ot be available to mark it right away. It could take a few weeks for your tutor/marker to mark everythig ad sed the marks to your school. Followig most lessos, there are oe or more learig activities to test your kowledge ad uderstadig of the lesso material. It is importat that you complete all learig activities carefully to the best of your ability so that you ca develop as may skills as possible to become efficiet ad employable i the accoutig field. Goal Settig Pla to succeed. Set aside specific times o a daily basis whe you will work o this course. Do ot allow other activities to divert your attetio. Oly dire emergecies should take precedece over your studies. Remember, completig oe page at a time to the ed of the course will lead to success ad to the achievemet of your goal of completig the course. Usig the Module ad Lesso Goal Chart o pages 14 18, fill i your target dates for each lesso. This will assist you i moitorig your progress as you work through the course. Be realistic ad allow adequate time to complete each lesso. It may take a few lessos for you to determie how much time you eed to complete each lesso. Make the ecessary adjustmets o your chart. Cotiue through the whole course usig the same process, always settig a target date. You have oe year from your registratio date to complete this course. If you eed this course to graduate this school year, remember to schedule ad complete your fial exam by Jue 1. 8 Grade 11 Accoutig Priciples

19 Whe Do You Your Assigmets? You ll be ig your assigmets to your tutor/marker as soo as you have completed them. Each time you mail somethig, you must iclude the Module Cover Sheet. Here is a chart showig exactly what you will be mailig i at the ed of each module. Module 1 Module Assigmets that You ll Be Sedig I Assigmet 1.1 Assigmet 1. Module Assigmet.1 Module 3 Assigmet 3.1 Module 4 Assigmet 4.1 Module 5 Assigmet 5.1 Module 6 Assigmet 6.1 Module 7 Assigmet 7.1 Module 8 Assigmet 8.1 What if You Need Help? Takig a idepedet study course is differet from takig a course i a classroom. Istead of the teacher tellig you to complete a assigmet, you eed to tell yourself. However, the followig two people ca help you be successful i your course: Your Tutor/Marker The first perso who ca help you is your tutor/marker. Tutor/markers are experieced teachers who tutor distace learig studets ad mark assigmets ad exams. Whe you are havig difficulty, be sure to cotact your tutor/marker, who is there to help you. If you are ot sure how to cotact your tutor/marker, phoe the Idepedet Study Optio at Module 1: Itroductio to Accoutig Priciples 9

20 Your Study Parter The ext perso who ca help you with your course is your study parter. A study parter is someoe you choose who will help you lear. It may be someoe who kows somethig about accoutig, but it does t have to be. A study parter could be someoe else who is takig this course, a teacher, paret, siblig, or a fried, or aybody else who ca help you. Most importatly, a study parter should be someoe you feel comfortable with ad will support you as you work through this course. Your study parter ca help you keep o schedule, check your work, help you make sese of assigmets, read your course with you, or look at your learig activities ad respod to them. You may eve study for your exam with your study parter. What Are the Guide Graphics For? Graphics have bee placed iside the margis of the course to idetify a specific task. Each graphic has a specific purpose to guide you. A descriptio of each graphic is described below: Assigmet: This guide graphic tells you that this is a assigmet that you complete ad sed to your tutor/marker. Iteret: If you have access to the Iteret, you ca use it to get more iformatio. Iteret access is optioal. Learig Activity: Complete this learig activity to help you review or practice what you have leared ad prepare for your assigmet ad exam. You will ot sed learig activities to your tutor/marker. Study Parter: Ask your study parter to help you with this task. It is ow time to your assigmets. 10 Grade 11 Accoutig Priciples

21 Time: This ico gives you a approximate idea of the amout of time that you will eed to complete this lesso or assigmet. The actual time that it takes to complete a assigmet varies from studet, so these are just rough guides. If you fid that you have completed a assigmet i much less time tha is listed o the ico, the you may eed to sped more time o it. If you fid that you are spedig much more time tha idicated, it may be time to move o. Key Poit: This ico idetifies importat iformatio you will eed to complete the course. Exam Preparatio: This ico refers to cotet i the course that is likely to be foud o either the fial exam. So, make sure that you lear it well. Remider: This ico is used to idetify importat poits you will eed to remember i order to complete the course. Folder: This ico is used to idetify assigmets that are to be collected i a folder for submissio to your tutor/marker for assessmet at the ed of a module. Module 1: Itroductio to Accoutig Priciples 11

22 Learig Activity 1.1 This is the first learig activity i the course ad it is a really easy oe. All you eed to do is to phoe your tutor/marker ad speak to him/her about you ad your course. Your tutor/marker is axious to fid out about you, ad this short phoe coversatio will help you complete the course as smoothly as possible. Your tutor/marker s phoe umber came with the letter that was attached to the course. If you ca t fid it, cotact the Idepedet Study Optio office at Phoe your tutor/marker ad be prepared to talk about the followig topics: Are you attedig school? If so, which oe? Why did you decide to take Grade 11 Accoutig Priciples through idepedet study? Is this your first time studyig a idepedet study course? Do you have ay cocers about the course? If so, what are they? You will otice that all other learig activities besides this oe have a aswer key. Because of the ature of this learig activity, it does ot eed oe. 1 Grade 11 Accoutig Priciples

23 Itroductio to Module 1 You are ow fiishig Lesso 1 of Module 1. Here is a list of the titles of each of the lessos i Module 1: Lesso 1: Itroductio Lesso : The Accoutig Equatio Lesso 3: The Balace Sheet Lesso 4: Preparig a Balace Sheet Lesso 5: Aalyzig Chages i the Accoutig Equatio Lesso 6: Recordig Chages i Fiacial Positio Lesso 7: Recordig Trasactios i T-Accouts Lesso 8: Calculatig New Balaces i the Ledger Lesso 9: Preparig a Trial Balace Lesso 10: Preparig a Updated Balace Sheet After Chages i Fiacial Positio There are two assigmets i this module to be ed to your tutor/marker. Assigmet 1.1 is at the ed of Lesso 6 ad it is worth 4 percet of your fial mark. Assigmet 1. is at the ed of Lesso 10, ad is worth 3 percet of your fial mark. Module 1: Itroductio to Accoutig Priciples 13

24 Module Topic Lesso Module ad Lesso Goal Chart Accoutig Priciples Lesso Topic Hours Learig Activity Assigmet Value Target Date Completio Date Module 1 18 hours 10 lessos 8 learig activities assigmets Itroductio The Accoutig Equatio 1 1. The Balace Sheet 1.3 Preparig a Balace Sheet 1.4 Aalyzig Chages i the Accoutig Equatio 1.5 Recordig Chages i Fiacial Positio Recordig Trasactios i T-Accouts 1.6 Calculatig New Balaces i the Ledger 1.7 Preparig a Trial Balace 1.8 Preparig a Updated Balace Sheet After Chages i Fiacial Positio 1. 3 (Oe moth after receivig the course) Itroductio to Accoutig Priciples 14 Grade 11 Accoutig Priciples

25 Module Topic Module ad Lesso Goal Chart Accoutig Priciples Lesso Lesso Topic Hours Learig Activity Assigmet Value Target Date Module 1 hours 6 lessos 4 learig activities 1 assigmet 1 Profit ad Loss Preparig a Icome Statemet.1 3 Debit ad Credit Rules for Icome Statemet Accouts. 4 Recordig Reveue ad Expese Chages i the Accouts.3 5 Preparig a Updated Trial Balace ad Icome Statemet.4 6 Preparig Balace Sheets i Report Form.1 4 Module 3 1 hours 3 lessos learig activities 1 assigmet 1 The Geeral Joural The Ledger ad Postig Procedures Subsidiary Ledgers Mid-term Exam 3 5 Completio Date Jourals ad Ledgers Keepig Track of It All The Icome Statemet I the Red or Black? Module 1: Itroductio to Accoutig Priciples 15

26 Module Topic Lesso Module ad Lesso Goal Chart Accoutig Priciples Lesso Topic Hours Learig Activity Assigmet Value Target Date Module 4 13 hours 6 lessos 5 learig activities 1 assigmet The Six-Colum Worksheet Preparig Fiacial Statemets from a Worksheet 4. Aalyzig Fiacial Statemets 4.3 Closig the Ledger 4.4 Postig the Closig Etries to the Ledger 4.5 Preparig a Post-Closig Trial Balace Completio Date The Worksheet Sharpe Your Pecil! 16 Grade 11 Accoutig Priciples

27 Module Topic Lesso Module ad Lesso Goal Chart Accoutig Priciples Lesso Topic Hours Learig Activity Assigmet Value Target Date Module 5 15 hours 6 lessos 6 learig activities 1 assigmet Cotrol of Cash Receipts 5.1 Sales ad Goods ad Services Tax 5. Multicolum Joural Petty Cash 5.4 Bakig at Fiacial Istitutios Bak Recociliatio Module 6 6 hours lessos 1 learig activity 1 assigmet Merchadisig Busiess Icome Statemet Cost of Goods Sold Completio Date Merchadisig Busiess Cash Cotrol Who s Got the Moey? Module 1: Itroductio to Accoutig Priciples 17

28 Module Topic Module ad Lesso Goal Chart Accoutig Priciples Lesso Lesso Topic Hours Learig Activity Assigmet Value Target Date Completio Date Module 7 16 hours 5 lessos 5 learig activities 1 assigmet 1 Itroductio to Payroll Payig Employees Payroll Deductios Payroll Register Payroll Liabilities ad Expeses Module 8 1 hours 4 lessos learig activities 1 assigmet 1 Persoal Icome Tax Federal ad Provicial/Territorial Tax Rates Preparig a Persoal Icome Tax Retur Profile Preparig a Persoal Icome Tax Retur Profile 3 Fial Exam 3 5 (Jue 1 if eeded for graduatio) Icome Tax Your Fair Share Payroll A Dollar Eared 18 Grade 11 Accoutig Priciples

29 Summary of Grade 11 Accoutig Priciples Hours Lessos Learig Activities Assigmets Value Module (1.1 & 1.) Module (.1) 4 Module (3.1) 10 Midterm Exam 3 5 Module (4.1) 5 Module (5.1) 6 Module (6.1) 5 Module (7.1) 8 Module (8.1) 5 Fial Exam 3 5 Totals % Module 1: Itroductio to Accoutig Priciples 19

30 N OTES 0 Grade 11 Accoutig Priciples

31 L ESSON : THE A CCOUNTING E QUATION Itroductio 1 hr This lesso describes the relatioship of assets, liabilities, ad ower s equity to the fudametal accoutig equatio. This equatio forms the basis of all your further study of accoutig. There are several websites are listed i this lesso ad throughout the course that provide more iformatio o the lesso topics. Be sure to take time to go to these Iteret sites to lear more about the lesso topics. Outcomes By the ed of this lesso, you should be able to uderstad the eed for ad purpose of the accoutig equatio classify assets, liabilities, ad ower s equity for busiess calculate total assets, total liabilities, ad ower s equity calculate the third missig elemet of the equatio whe two elemets are give The Accoutig Equatio Accoutig systems ad fiacial records are methods of measurig busiess performace ad keepig track of persoal fiaces. Assets = Liabilities + Ower s Equity Eter the followig address i your Iteret browser to access a website for more iformatio about the accoutig equatio. Click o the accoutig equatio lik o this website: Module 1: Itroductio to Accoutig Priciples 1

32 Assets Aythig of value owed by a busiess or a idividual is cosidered a asset. Assets iclude: Cash currecy ad cheques (from customers or others) o had plus the total of all moey deposited i the bak Accouts receivable* Office supplies Value of lad ad buildigs owed by the busiess ot reted Office furiture Office equipmet Assets are recorded ad maitaied at their cost price that is, at the price paid for them. This is part of what is referred to as the cost priciple. Liabilities The sum of all moey owed to others is cosidered a liability. Liabilities iclude the followig: Bak loas Accouts payable** Mortgages o lad ad buildig Ower s Equity Ower s equity is the dollar amout recorded i the Capital accout of the et or actual ivestmet ito the compay by the ower. This gives the ower claim o the assets. It is also called capital or et worth. The followig is a example of ower s equity: You purchase a house for $60,000, payig $10,000 cash towards the purchase. You borrow the remaiig amout ad have a mortgage or debt of $50,000. The actual amout you ow is $10,000. The bak ows the other $50,000 for ow. Your ower s equity is $10,000. This will chage over time as you pay moey towards your mortgage ad reduce the amout you owe the bak. Ower s equity will icrease because you will ow more of the house ad evetually (hopefully) you will ow all of it. * A Accout Receivable does ot represet actual cash o had, but rather represets a amout owed to the busiess by a customer. This amout is expected to be collected withi a reasoably short time from the customer. Therefore, accouts receivables are cosidered assets ad cotribute to the total of the ower s equity. ** Accouts Payable represets amouts owed to other busiesses or idividuals (creditors) by our busiess. This is our debt or the debt of the busiess. Keep i mid that we, the busiess, owe this moey for thigs we have purchased o accout. The purchases could iclude aythig such as assets, expeses, services, merchadise, etc. Grade 11 Accoutig Priciples

33 What a busiess ows = Assets What a busiess owes = Liabilities Net Worth of the Busiess = Ower s Equity Assets = Liabilities + Ower s Equity Example: Pey Forest Assets (what she ows, eve if ot completely paid) Cash o had ad i bak $1,000 House ad Lot 156,000 Furiture 39,000 Car 7,000 Total Assets $34,000 Liabilities (what she owes) Accouts Payable, Leo s $1,750 Accouts Payable, Visa 6,375 Mortgage o House 11,000 Balace of Bak Loa for Car 15,000 Total Liabilities $146,15 Assets = Liabilities + Pey Forest s Equity $34,000 = $146,15 + equity $34,000 = $146,15 + $87,875 Accouts Receivable are assets sice they represet amouts that are soo expected to be collected as cash from debtors. Accouts Payable are accouts to be paid by the idividual or busiess to a creditor. They are claims agaist the assets ad reduce the ower s equity (et worth or capital). These are the debts that the busiess has icurred. Eter the followig address i your Iteret browser for a website o a glossary for accoutig terms. Prit the glossary for a hady referece: Module 1: Itroductio to Accoutig Priciples 3

34 Learig Activity 1. It is importat to complete all the questios i each learig activity to give you the eeded practice to become competet ad cofidet i gaiig employable skills. Exam questios are based o learig activity questios ad procedures, so be sure to complete each questio carefully. This will help you to retai the iformatio. Make sure that you cotact your tutor/marker if you have ay questios. Remember, you do ot learig activities to your tutor/marker. Now that you have read the lesso ad have leared about the accoutig equatio, you will have the opportuity to work with the accoutig equatio i this learig activity. It is a good idea to orgaize your files by creatig a assigmet folder ad amig each file as idicated, i a systematic format. You may wish to create a folder for each module withi the assigmet folder. 1. Create a ew Word file to aswer questios a, b, ad c. Save the file as Mod1LesQues1.doc a. What is a asset? b. What is a liability? c. Explai the Cost Priciple. d. What is a debtor? e. What is a creditor? Cotiued 4 Grade 11 Accoutig Priciples

35 Learig Activity 1. (Cotiued). Create a ew Excel spreadsheet to complete the followig questios. Save the file as Mod1LesQues1.xls. Create the tables as show ad fill i the blaks. a. Fid the missig amout. Example Assets = Liabilities + Ower's Equity A 11,000 1,500? B ? C 5,000? 1,60 D? 15,01 1,530 E 18,000? 6,450 F 45,650? 10,50 G 600, ,30? H? 5,048 6,34 I?,85 0 J 4,15?,56 K 8,56 5,36? Cotiued Module 1: Itroductio to Accoutig Priciples 5

36 Learig Activity 1. (Cotiued) b. Classify each item by the letter code. A = Asset L = Liability OE = Ower's Equity Example: Cash o had A 1 Sharo Gold s ivestmet Cash i Bak 3 Bak Loa Payable 4 Truck 5 Camera Equipmet 6 Market Photo Equip (a creditor) 7 Mary Scott (a cliet) owes us moey 8 Accouts Receivable 9 Office Equipmet 10 Darkroom Supplies 11 Buildig 1 Mortgage Payable 13 Photo Supplies 14 Furiture Ed-of-Lesso Checklist q Now that you have completed the questios i this lesso, use the Module 1 Learig Activity Aswer Key to esure that your aswers are correct. It is foud at the ed of Module 1. q Retur to the Module ad Lesso Goal Chart ad fill i the actual date of completio. Did you meet your goal for completio of Lesso? q Sed a to your tutor/marker ad outlie your goal schedule. 6 Grade 11 Accoutig Priciples

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