Lesson Plan 1.2 – Basic Accounting Equation
Course Title – Accounting I
Session Title –Basic Accounting Equation
Lesson Objective – Understand the accounting checks and balances system
with the accounting equation.
Behavioral Objectives:


Define terms related to the basic accounting equation.
Solve the basic accounting equation for missing numbers.
 Classify accounts.
Preparation
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
120.42.C:
1.b. apply basic accounting concepts
130.166.C:
1.a. describe the purpose of
and terminology;
7.a. follow oral and written
instructions;
7.b. develop time management skills
by setting priorities for completing
work as scheduled;
accounting and financial reporting.
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the
mathematical processes and tools used in problem solving.
Materials Needed:


Textbook
Flip chart, poster board, dry erase board, - or- butcher paper
Materials and Equipment Needed:


Computer with Internet access
Textbook
Teaching Strategies:

Demonstration
Lesson Plan 1.2 – Basic Accounting Equation
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
 Observation
Learner Preparation: Have students use the “Owe and Own worksheet” to
brainstorm a few things they own and a few things they owe (or they think a
family probably owes)
Assessment:


Observation
Checking for Understanding
Additional Resources:
Textbooks:
Guerrieri, Donald J., Haber, Hoyt, Turner. Glencoe Accounting RealWorld Applications and Connections. Glencoe McGraw-Hill 2000.
ISBN/ISSN 0-02-815004-X.
Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 Accounting
Multicolumn Journal Anniversary Edition, 1st Year Course. SouthWestern Educational and Professional Publishing, 2003.
ISBN/ISSN: 0-538-43524-0
Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 General
Journal Accounting Anniversary Edition, 7th Edition. SouthWestern Educational and Professional Publishing, 2003.
ISBN/ISSN: 0-538-43529-1.
Websites:
Accounting Equation - QuickMBA: Accounting, Business Law, Economics,
Entrepreneurship, Finance, Management, Marketing, Operations,
Statistics, Strategy;
http://www.quickmba.com/accounting/fin/equation/
Dictionary of Small Business, Dictionary of Small Business, .
http://www.small-business-dictionary.org/
InvestorWords.com - Investing Glossary,
http://www.investorwords.com/49/accounting_equation.html
Accounting Concepts Tutorial-Accounting Equation. Financial Services
Office.
http://www.fso.arizona.edu/training/tutorials/accounting/equation1.html
Lesson Plan 1.2 – Basic Accounting Equation
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
Name: ______________________
Date: __________________
QUIZ ON THE ACCOUNTING EQUATION
1. An asset is
a. Something owed
b. Something owned
c. Investment in the business
d. Business’ Net worth
2. A liability is
a. Something owed
b. Something owned
c. Investment in the business
d. Business’ Net worth
3. Another word for capital is
a. Investment
b. Net Worth
c. Owner’s Equity
d. All of the above
4. Cash is a (n)
a. Asset
b. Liability
c. Capital
d. None of the above
5. Equipment is a (n)
a. Asset
b. Liability
c. Capital
d. None of the above
6. The accounting equation is
a. Assets + Liabilities = Capital
b. Assets = Liabilities + Capital
c. Liabilities – Capital = Assets
d. None of the above
7. A beginning business has a cash balance of $5,500. They owe no money. What is their
investment in the business?
a. 0
b. $2,250
c. $5,500
d. None of the above
8. Which business is more likely to get a bank loan?
a. Business A: Assets $7,000; Liabilities $6,500
b. Business B: Assets $9,200; Liabilities $87,000
c. Business C: Assets $5,100; Liabilities $100
d. Business D: Assets $450; Liabilities $150
QUIZ ON THE ACCOUNTING EQUATION - 1.2.1
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Name: ______________________
Date: __________________
QUIZ ON THE ACCOUNTING EQUATION KEY
1
An asset is
a. Something owed
b. Something owned
c. Investment in the business
d. Business’ Net worth
2
A liability is
a. Something owed
b. Something owned
c. Investment in the business
d. Business’ Net worth
3
Another word for capital is
a. Investment
b. Net Worth
c. Owner’s Equity
d. All of the above
4
Cash is a (n)
a. Asset
b. Liability
c. Capital
d. None of the above
5
Equipment is a (n)
a. Asset
b. Liability
c. Capital
d. None of the above
6
The accounting equation is
a. Assets + Liabilities = Capital
b. Assets = Liabilities + Capital
c. Liabilities – Capital = Assets
d. None of the above
7
A beginning business has a cash balance of $5,500. They owe no money. What is their
investment in the business?
a. 0
b. $2,250
c. $5,500
d. None of the above
8
Which business is more likely to get a bank loan?
a. Business A: Assets $7,000; Liabilities $6,500
b. Business B: Assets $9,200; Liabilities $87,000
c. Business C: Assets $5,100; Liabilities $100
d. Business D: Assets $450; Liabilities $150
QUIZ ON THE ACCOUNTING EQUATION - 1.2.1
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Name: ____________________Date: ____________________
OWE AND OWN WORKSHEET
What I own:
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
Lesson 1.2 – Owe and Own Worksheet
What I owe (or a few things
a family probably owes):
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
________________
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I