Overview:Our main objective in Packet 5 is to begin to capture the results of operations in the accounting system. This system will provide us with information to prepare reports for stakeholders outside the business (financial accounting) and provide inputs for use inside the business (managerial accounting).

Semester case

W.T. is ready to open for business! Once he does, he'll need to keep careful track of his operations so that he has good information to make decisions for the business. In addition, he told one of his aunts about his business idea and she said she might be willing to invest to help him grow the business. But, she said she'd need to see a full set of financial statements for his first semester of operations. It will be a few months before he needs to provide those to her, but he wants to make sure he has a good accounting system in place so he can provide them when the time comes. As you read the text and watch the videos, keep W.T.'s situation in mind.

Key questions:

1.What are the three sources of business assets?

-Investments, borrowing, and earnings

2.How does your answer to question #1 relate to the accounting equation?

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Key terms. Using your own words, define the following:

1.Accounts

2.Assets

3.Liabilities

4.Stockholders' Equity

5.Common stock

6.Retained earnings

7.Accounting event

8.Transaction

9.Historical cost concept

10.Stewardship