CATE Understanding the Accounting Equation Lesson Plan

ACP Lesson Plan 

Title: Understanding the Accounting EquationAuthor: Sue Craver
Subject(s):  Accounting
Grade Level(s): High SchoolTotal Time: 90 minutes

Overview / Description: 

In this lesson, students will learn the fundamental accounting equation and its importance to business transactions.

Learning goals/objectives:

To understand the fundamental accounting equation, which defines assets, liabilities and owner's equity, as it applies to the financial condition of an organization. 

After completing this activity, students should be able to . . .

  • Understand the components of the accounting equation (Assets, Liabilities, Owner’s Equity) and provide examples of each.

  • Check the balance of the accounting equation after a business transaction has been analyzed and recorded.
  • Solve the basic accounting equation for missing numbers.
  • Define basic accounting terminology.

Workplace Readiness Skill: 

    Social Skills  x Communication 
 x  Teamwork     x    Critical Thinking
   Attitude and Initiative  x  Planning and Organization
 x  Professionalism    Media Etiquette

Content Standards:

Wisconsin Standards for Business and Information Technology

Accounting and Finance

AF1.a:Identify current structures and regulations affecting accounting principles and their effects on businesses.

AF1.a.4.h:Distinguish between the accrual basis of accounting and the cash basis of accounting and discuss the impact each has on financial statement

AF1.b:Analyze the effects of changes in assets

       AF1.b.4.h:Journalize and post accounts receivable transaction

AF1.c:Analyze the effects of changes in liabilities

              AF1.c.4.h:Journalize and post accounts payable transactions

AF1.d:Analyze the effects of changes in owner’s equity.

AF1.d.6.h:Demonstrate appropriate accounting techniques used to account for investments and withdrawals by owners


Textbook: Glencoe Accounting, by Guerrieri, Haber, Hoyt and Turner, McGraw Hill, ISBN:978-002-140088-1 OR accounting textbook of the teacher's choosing

YouTube Video – Accounting Equation Explained:

ACCOUNTING EQUATION for BEGINNERS: Assets, Liabilities and Equity

PowerPoint: Accounting Equation Overview:

Download: TheAccountingEquationPPT.pptx


Download: BalancetheEquationWorksheet.xlsx

Download: CompletetheTransactionWorksheet_Instructions.docx

Download: CompletetheTransactionsWorksheet.xlsx

End of unit quiz:

Download: Accounting_Equation_Quiz_and_answers.docx

Learning Activities:

WHO (T=Teacher Focus Lesson; WG=Whole Group\; SM=Small Group; I=Independent)

Learning Activity Task                                                WHO is responsible
for this step?
Approximate time
for task
Accounting Equation PowerPoint - Teacher will review the PowerPoint on the accounting equation. Have the students make note of the accounting terms on slide three and the questions listed on slide four. T20 minutes
Accounting Equation Video - The teacher should then show the short video that provides concise overview of the accounting equation.T5 minutes
Accounting terms and questions from the PowerPoint - The terms and questions will be reviewed at the end of the presentation and video. Students should find and write down the definitions for the terms listed (the teacher can put that slide back on the screen). Then the students should get into small groups (4-6 students) and discuss the questions and come up with responses. The small groups then will present their answers to those questions.SM/I30-40 minutes
Balance the equation worksheet and complete the transaction worksheet - Students will then complete the "balance the equation" worksheet. This should be done individually. 
Students will then do the "complete the transaction" worksheet. This is done individually by the students. The instructions are listed in the MS Word document and the worksheet is in the MS Excel attachment.
I20 minutes
Accounting terms quiz - The final assignment is a 10 question fill in the blank quiz.I10 minutes


  • Group work on terms and accounting questions.
  • Balance the worksheet assignment.
  • Complete the transaction worksheet assignment.
  • Accounting terms quiz.


This is an in depth overview of the fundamental accounting equation, which sets a solid foundation for a high school accounting course.

Extension Activity (for intervention or enrichment):

Teacher could lead a "think-pair-share" after the balance the equation worksheet and complete the transaction worksheet to check for understanding.

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