Learning Objectives

1. Record in equation form the financial effects of a business transaction.
2. Define, identify, and understand the relationship between asset, liability, and owner’s equity accounts.
3. Analyze the effects of business transactions on a firm’s assets, liabilities, and owner’s equity and record these effects in accounting equation form.
4. Prepare an income statement.
5. Prepare a statement of owner’s equity and a balance sheet.
6. Define the accounting terms new to this chapter.