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Nature of Business and Accounting Types of Businesses Role of Accounting in Business Role of Ethics in Accounting and Business Opportunities for Accountants Summarize the development of accounting principles and relate them to practice. Generally Accepted Accounting Principles Business Entity Concept Cost Concept EE 1-1 State the accounting equation and define each element of the equation. The Accounting Equation EE 1-2 Describe and illustrate how business transactions can be recorded in terms of the resulting change in the elements of the accounting equation.
20,000 +20,000 Bal. 5,000 20,000 c. +1,350 Bal. 5,000 +1,350 20,000 d. +7,500 Bal. 12,500 1,350 20,000 e. –3,650 Bal. 8,850 1,350 20,000 f. –950 Bal. 7,900 1,350 20,000 g. –800 Bal. 7,900 550 20,000 h. –2,000 Bal. 5,900 550 20,000 Owner’s Equity Accounts Chris Clark, Chris Clark, Fees Wages Rent Supplies Utilities Misc. = Payable + Capital – Drawing + Earned – Exp. – Exp. – Exp. – Exp. – Exp. +25,000 25,000 +1,350 +1,350 25,000 1,350 25,000 +7,500 7,500 1,350 –950 400 25,000 7,500 –2,125 –2,125 –800 –800 25,000 7,500 –2,125 –800 400 400 25,000 25,000 –2,000 –2,000 7,500 –2,125 –800 –800 –800 7,500 –2,125 –800 –800 –450 –450 –275 –275 –450 –275 –450 –275 –450 –275 The four types of transactions affecting owner’s equity are illustrated in Exhibit 5.