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Semelhante a Accounting - Chapter 1
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Accounting - Chapter 1
- 1. Accounting and the Business Environment Chapter 1
- 3. Accounting... is an information system that... measures business activities, processes information, and... communicates financial information.
- 4. Accounting... is called the language of business.
- 5. Users of Accounting Information External users make decisions about the entity. Internal users make decisions for the entity.
- 6. Fields of Accounting Management Accounting Financial Accounting
- 7. The Authority Underlying Accounting Public Sector (SEC) Private Sector (FASB) Private Sector (AICPA) (IMA) GAAP
- 8. Standards of Professional Conduct AICPA’s Code of Professional Conduct Standards of Ethical Conduct of the Institute of Management Accountants
- 9. Types of Business Organizations Proprietorships Partnerships Corporations
- 18. The Reliability (Objectivity) Principle Information must be reasonably accurate. Information must be free from bias. Information must report what actually happened. Individuals would arrive at similar conclusions using same data.
- 19. The Cost Principle Assets and services acquired should be recorded at their actual cost.
- 20. The Going Concern Concept The entity will continue to operate in the future.
- 21. The Stable-Monetary-Unit Concept The dollar’s purchasing power is relatively stable.
- 23. The Accounting Equation Economic Resources Claims to Economic Resources Assets = Liabilities + Owner’s Equity
- 27. Transactions that Affect Owner’s Equity OWNER’S EQUITY INCREASES OWNER’S EQUITY DECREASES Owner Investments in the Business Revenues Expenses Owner Withdrawals from the Business Owner’s Equity
- 34. Accounting for Business Transactions Owner’s Assets = Liabilities + Equity 1) Cash + $30,000 + $30,000 2) Cash – 20,000 Land + 20,000 3) Supplies + 500 + 500 4) Cash + 5,500 + 5,500 5) Receivable + 3,000 + 3,000 6) Cash – 3,300 – 3,300 7) Cash – 300 – 300 Totals + $35,400 + 200 + $35,200
- 38. Financial Statements... – are the final product of the accounting process. – tell how the business is performing and where it stands.
- 42. Relationships Among the Statements: Statement of Owner’s Equity G. Gillen, capital, April 1, 20xx $ 0 Contribution of capital 30,000 Net income $ 5,200 Cash distributions – 2,000 G. Gillen, capital, April 30, 20xx $33,200
- 43. Relationships Among the Statements: Balance Sheet Assets Cash $19,900 Accounts receivable 2,000 Supplies 500 Land 11,000 Total assets $ 33,400 Liabilities Accounts payable $ 200 Owner’s equity, G. Gillen, capital 33,200 Total liabilities and owner’s equity $33,400
- 46. End of Chapter 1
Notas do Editor
- Accounting can be divided into two fields – financial accounting and management accounting. Financial accounting focuses on information for people outside the entity. Management accounting focuses on information for internal decision makers of an entity.
- All professions have regulations. Accounting is no different. The major organizations that influence the profession are shown here. In the public sector, the Securities and Exchange Commission (SEC) requires companies to have their financial statements audited by independent accountants. In the private sector, the FASB determines how accounting is practiced in the United States, which is put forth in generally accepted accounting principles, called GAAP. The American Institute of Certified Public Accountants and the Institute of Management Accountants in the private sector work closely with both the SEC and the FASB.
- Ethical considerations affect everything accountants do. External users making investment decisions rely on the financial information accountants generate, yet there is considerable pressure on the accountants to make the company’s financial position look as good as possible. See the conflict? Both the AICPA and the IMA have codes or standards of ethical conduct for their members, and the vast majority of accountants adhere to them without any difficulty. It’s the headline-makers associated with companies such as Enron and Worldcom that harm investor confidence and rock the stock market.