“Getting started with financial accounting”(In less then 5 Minutes!)

To play these exciting playstation gameswe need a play station 1st!

Play Stations cost money

That’s how much we need

$ 150

Let’s see how much we have

Can we buy this from our pocket money?

Nothing left from my pocket money.

Wait! The piggy bank has some money!!

60 Bucks. Not Bad!

Need to ask dad (better still Mom) for a loan

50 Bucks.That’s what

Dad can spare.

Still not Enough !

60 Bucks from the Piggy Bank & 50 Bucks from dad

That’s a cool 110 bucks!.

60 Bucks 50 Bucks

+ =110

?Now What ?

Where do we get that?

40 Bucks Short

Tommy !His Piggy Bank’s Bursting

If Tommy can put in 40 bucks

He can Share the Playstation

Tommy’s IN !My New partner..I need 40 Bucks

But Tommy wants to be an equal partnerI put in 60 Bucks

And here’s his 60 bucks!

More than enough money to buy the Playstation

+

=+

170

Piggy Bank 60

From Dad 50

From Tommy 60

Let’s do some quick math

The Playstation only costs 150

Money Left Over $20

Let’s talk money language

That’s the name for

Where the money came from(also known as SOURCE)

Liability

Like any languagemoney language also has a vocabulary

Money that you put in is Owner’s Capital

*When you have a Partner (like Tommy) that’s

Shareholders Capital*

Loan from Mom or Dad known as Loans

Let’s go get that Playstation and hook it up

Where the Money went

Lets play with the gamesthat came with the Playstation

Image of 2 kids buying a playstation

Time For some more Money Language

ASSETSOR

Where the Money went(also known as Application of Funds)

Money that’s Left over is also an Asset (Known as Cash Balance)

A statement Balancing

Where the money came from

with

Where the Money went

Is called a Balance Sheet

Back to the Money Language

Our very 1st Balance Sheet

Liabilities (Where the Money came from)

*

Shareholders CapitalME $60Tommy $60

*Loans

Dad $50

Total $170

Assets (Where the Money went)

Playstation $150*Cash Balance $20(Money Left Over)

Total $170