COMM 111Introduction to Financial Accounting
Introduction to Accounting
September 11, 2011
What Is Accounting?
A Frenemy Example
On August 31, Jason and Ashley started arguing who was better off.
Jason said he was better off because he owned a PlayStation console
that he bought last year for $350. He figures that, if needed, he could sell
it to a friend for $280. Ashley argued that she was better off because she
had $1,000 cash in her bank account and a piece of art that she bought
two years ago for $800 but could now probably sell for $1,400.
Jason countered that Ashley still owed $250 on a loan and that Jason’s
dad promised to buy him a Porsche if he would do really well in his
accounting class. Jason said he had $6,000 cash in his bank account right
now because he just received a $4,800 student loan. Ashley knew that
Jason also owed a tuition installment of $800 for the coming term.
Jason vs. Ashley
They owed... Forms of Organization Sole Proprietorship
Separation of management and ownership