Lesson: 8
Topic: Establishing Accounts (The Simple Ledger)
Objectives:
During this class students will examine the function and structure of the basic T-account. In addition, students will be introduced to debit/credit theory. Students will learn where to place the opening balance within an asset, liability or owner's equity account.
At the conclusion of the class, students should understand the following concepts:
Method of Instruction and Evaluation:
After a Socratic lecture on the above topics, students will complete Exercise #1 on page 82.
Expectations Addressed:
The "Fundamental Accounting Practices" strand of the BAF3M Ministry of Education Curriculum Guidelines outlines all of the following specific expectations. The expectations addressed by this lesson have been highlighted below.
Introduction to Accounting as a Discipline:
explain the purpose of accounting;
explain the difference between accounting and bookkeeping;
identify the users and uses of accounting;
identify the Generally Accepted Accounting Principles (GAAP) and explain their importance.
Business Structures:
describe the characteristics of different forms of business organization, including sole proprietorship, partnership, and corporation;
describe the advantages and disadvantages of different forms of business organization, including sole proprietorship, partnership, and corporation;
explain the differences among the equity sections of different forms of business organization, including sole proprietorship, partnership, and corporation (e.g., capital account in a sole proprietorship versus common stock in shareholders’ equity in a corporation).
The Accounting Cycle for a Service Business:
assess the effects that transactions have on the accounts and financial statements of a service business;
record transactions using the journals and ledgers of a service business;
prepare a trial balance and the financial statements for a service business;
record adjusting and closing entries for a service business (e.g., prepaid expenses, amortization, accruals);
describe the impact of year-end procedures, including adjusting and closing entries, on the financial statements of a service business;
apply the Generally Accepted Accounting Principles (GAAP) at each stage of the accounting cycle for a service business.
References: