TEACHING TIPS New to this edition: Purchase of supplies is now capitalized instead of expensed. This is consistent with GAAP and also prepares students who move on to Principles of Accounting or Intermediate Accounting. Suggested in-class problems: ● Exercise 1-1 (accounting equation) ● Exercise 1-3 (accounting equation) ● Exercise 1-7 (transaction analysis) ● Demo problem (located in the Instructor’s Resource Manual) Suggested homework: ● Problem 1-1 (transaction analysis) ● Problem 1-4 (transaction analysis) In-class activity: Create a set of three note cards for each student; label the cards “Assets,” “Liabilities,” and “Owner’s Equity.” Call out different account names and ask students to raise the correct note card. For example, if you call out “Prepaid Insurance,” the students should raise the note card labeled “Assets.” LEARNING OBJECTIVES 1. Define and identify asset, liability, and owner’s equity accounts. 2. Record, in column form, a group of business transactions involving changes in assets, liabilities, and owner’s equity. 3. Define and identify revenue and expense accounts. 4. Record, in column form, a group of business transactions involving all five elements of the fundamental accounting equation. ACCOUNTING LANGUAGE Account numbers Equity Accounts Expenses Accounts Payable Fair market value Accounts Receivable Fundamental accounting equation Assets Liabilities Business entity Owner’s equity