Acc 210 Lecture 1
What is Accounting?
The process of:
1.  Analyzing Economic Events ("transactions")
2.  Recording the transactions -- in a journal
3.  Classifying the transactions -- in a ledger
4.  Summarizing the transactions -- Financial Statements
a.  Income Statement:  Revenues - Expenses = Net Income
b.  Owner's Equity Statement:  shows owner's claim
c.  Balance Sheet:  Assets = Liabilities + Owner's Equity
d.  Cash Flow Statement:  shows where cash came from and
went to
5. Communicating the results
Questions
1.  Name a necessary condition for an economic event to be
considered a transaction.
2.  How are the transactions ordered (sorted) in a journal?
3.  How are the transactions ordered in a ledger?
4.  What is revenue?  Name a company and how it earns revenue.
5.  What is an expense?  Give five examples.
6.  What is net income and how is it calculated?
7.  How can net income be increased?
8.  What is the balance sheet equation?
9.  Define Asset, Liability and give examples.
10. Is revenue the same thing as a receipt of cash?  Explain.
11. Is an expense the same thing as a payment of cash?  Explain.
12.  If we have an income statement, why would we need a cash flow
statement?