Chapter One - Accounting Equation “ACCOUNTING IS THE...

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Unformatted text preview: Accounting Equation “ACCOUNTING IS THE LANGUAGE OF BUSINESS” Another language Measures and Communicates using this language Communicates activities of a business(transactions) using accounts Accounts are details summarized in Classifications Sole Proprietorship – one owner Owner gets all income, others can take personal assets Partnership – more than one owner Partners share in liability and income Limited Liability Partnership Law firms, accounting firms- cannot take personal assets Corporation Limited Liability, double taxation Knowledge of classifications will help understand the transactions of a business A = ASSETS L = LIABILITIES SE = STOCKHOLDER’S EQUITY R = REVENUE E = EXPENSES CASH MARKETABLE SECURITIES ACCOUNTS RECEIVABLE PREPAID EXPENSES SUPPLIES EQUIPMENT BUILDING INVESTMENTS Listed by Liquidity...
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This note was uploaded on 11/20/2011 for the course FINANCE 640,722 taught by Professor Chabiyo,reeves during the Fall '11 term at Ohio State.

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Chapter One - Accounting Equation “ACCOUNTING IS THE...

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