1
Chapter
Starting a Proprietorship:
Changes That Affect the
Accounting Equation
LEARNING OBJECTIVES
After studying Chapter 1, in addition to defining
key terms, you will be able to:
LO1 Describe the different users
of accounting information.
LO2 Prepare a net worth
statement and explain its
purpose.
LO3 Classify accounts as assets,
liabilities, or owner's
equity and demonstrate
their relationship in the
accounting equation.
LO4 Analyze the effects of
transactions on the
accounting equation.
LO5 Distinguish between cash
and on account transactions.
LO6 Compare and contrast the
LO7 Explain the difference
between expenses and
liabilities.
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types of transactions that
increase and decrease
owner's equity.
4
Chapter 1
Starting a Proprietorship: Changes That Affect the Accounting Equation
