会计专业英语（上）fundamental accounting principles

Fundamental Accounting Principles,Wild/Larson/Chiappetta 18th Edition,会计专业英语,Chapter 1,Accounting in Business,Conceptual Chapter Objectives,C1: Explain the purpose and importance ofaccounting in the information age C2: Identify users and uses of accounting C3: Identify opportunities in accounting and related fields C4: Explain why ethics are crucial in accounting C5: Explain the meaning of GAAP, and define and apply several key accounting principles C6: Appendix 1B: Identify and describe the three major activities in organizations,Analytical Chapter Objectives,A1: Define and interpret the accounting equation and each of its components A2: Analyze business transactions using the accounting equation A3: Compute and interpret return on assets A4: Appendix 1A: Explain the relation between return and risk,Procedural Chapter Objectives,P1: Identify and prepare basic financial statements and explain how they interrelate,Identifies,Records,Communicates,Relevant,Reliable,Comparable,Importance of Accounting,Accounting,is a system that,informationthat is,to help users make better decisions.,C1,Identifying Business Activities,Recording Business Activities,Communicating Business Activities,Accounting Activities,C 1,Users of Accounting Information,C 2,Users of Accounting Information,Internal Users,Managerial accounting provides information needs for internal decision makers.,C 2,Opportunities in Accounting,C 3,Accounting Jobs by Area,C 3,Beliefs that distinguish right from wrong,Accepted standards of good and bad behavior,EthicsA Key Concept,C 4,Identify ethical concerns,Analyze options,Make ethical decision,Use personal ethics to recognize ethical concern.,Consider all good and bad consequences.,Choose best option after weighing all consequences.,Guidelines for Ethical Decisions,C 4,Financial accounting practice is governed by concepts and rules known as generally accepted accounting principles (GAAP).,Generally Accepted Accounting Principles,C 5,The Securities and Exchange Commission is the government group that establishes reporting requirements for companies that issue stock to the public.,Setting Accounting Principles,Financial Accounting Standards Board is the private group that sets both broad and specific principles.,C 5,The International Accounting Standards Board (IASB) issues International Financial Reporting Standards that identify preferred accounting practices.,Principles of Accounting,C 5,Principles of Accounting,C 5,Business Entity Forms,Sole Proprietorship,Partnership,Corporation,C 5,* Proprietorships and partnerships that are set up as LLCs provide limited liability.,Characteristics of Businesses,C 5,Owners of a corporation are called shareholders (or stockholders). When a corporation issues only one class of stock, we call it capital stock.,Corporation,C 5,Accounting Equation,A1,Assets,=,Liabilities,+,Equity,EQUITY,Sarbanes-Oxley Act,Also known as SOX Passed by Congress to help curb financial abuses at companies that sell stock to the public Requires accounting oversight and stringent internal controls Penalties include stock market delisting and criminal prosecution,Land,Equipment,Buildings,Cash,Vehicles,Store Supplies,Notes Receivable,Accounts Receivable,Resources owned or controlled by a company,Assets,A1,Taxes Payable,Wages Payable,Notes Payable,Accounts Payable,Creditors claims on assets,Liabilities,A1,CAPITAL,Owner Investments,Equity,A1,Expanded Accounting Equation,A1,Transaction Analysis Equation,The accounting equation MUST remain in balance after each transaction.,A2,Transaction Analysis,The accounts involved are:(1) Cash (asset)(2) Owner Capital (equity),J. Scott invests $20,000 cash to start the business.,A2,Transaction Analysis,J. Scott invests $20,000 cash to start the business.,A2,The accounts involved are:(1) Cash (asset)(2) Supplies (asset),Transaction Analysis,Purchased supplies paying $1,000 cash.,A2,Transaction Analysis,Purchased supplies paying $1,000 cash.,A2,The accounts involved are:(1) Cash (asset) (2) Equipment (asset),Transaction Analysis,Purchased equipment for $15,000 cash.,A2,Transaction Analysis,Purchased equipment for $15,000 cash.,A2,The accounts involved are:(1) Supplies (asset)(2) Equipment (asset)(3) Accounts Payable (liability),Transaction Analysis,Purchased Supplies of $200 and Equipment of $1,000 on account.,A2,Transaction Analysis,Purchased Supplies of $200 and Equipment of $1,000 on account.,A2,Transaction Analysis,The accounts involved are:(1) Cash (asset) (2) Notes payable (liability),Borrowed $4,000 from 1st American Bank.,A2,Transaction Analysis,Borrowed $4,000 from 1st American Bank.,A2,Transaction Analysis,The balances so far appear below. Note that the Balance Sheet Equation is still in balance.,A2,Transaction Analysis,Now, lets look at transactions involving revenue, expenses and withdrawals.,A2,The accounts involved are:(1) Cash (asset) (2) Revenues (equity),Transaction Analysis,Provided consulting services receiving $3,000 cash.,A2,Transaction Analysis,Provided consulting services receiving $3,000 cash.,A2,The accounts involved are:(1) Cash (asset)(2) Salaries expense (equity),Transaction Analysis,Paid salaries of $800 to employees.,Remember that the balance in the salaries expense account actually increases. But, equity decreases because expenses reduce equity.,A2,Transaction Analysis,Remember that expenses decrease equity.,Paid salaries of $800 to employees.,A2,The accounts involved are:(1) Cash (asset)(2) Withdrawals (equity),Transaction Analysis,A withdrawal of $500 is made by the owner.,Remember that the withdrawal account actually increases. But, total equity decreases because the withdrawal reduces equity.,A2,Transaction Analysis,Remember that withdrawals decrease equity.,A withdrawal of $500 is made by the owner.,A2,Financial Statements,Lets prepare the Financial Statements reflecting the transactions we have recorded.,Income Statement Statement of Owners Equity Balance Sheet Statement of Cash Flows,P1,Net income is the difference between Revenues and Expenses.,The income statement describes a companys revenues and expenses along with the resulting net income or loss over a period of time due to earnings activities.,Income Statement,P1,The net income of $2,200 increases Owners Equity by $2,200.,Statement of Owners Equity,P1,The Balance Sheet describes a companys financial position at a point in time.,Balance Sheet,P1,Statement of Cash Flows,P1,ROA is viewed as an indicator of operating efficiency.,Return on Assets (ROA),A3,Chapter 2,Analyzing and Recording Transactions,Conceptual Learning Objectives,C1: Explain the steps in processing transactions C2: Describe source documents and their purpose C3: Describe an account and its use in recording transactions C4: Describe a ledger and a chart of accounts C5: Define debits and credits and explain their role in double-entry accounting,Analytical Learning Objectives,A1: Analyze the impact of transactions on accounts and financial statements A2: Compute the debt ratio and describe its use in analyzing financial position,Procedural Learning Objectives,P1: Record transactions in a journal and post entries to a ledger P2: Prepare and explain the use of a trial balance P3: Prepare financial statements from business transactions,External Transactions occur between the organization and an outside party.,Internal Transactions occur within the organization.,Analyzing and Recording Process,Exchanges of economic consideration between two parties.,C 1,Analyze each transaction and event from source documents,Analyzing and Recording Process,C 1,Sales Tickets,Bank Statements,Purchase Orders,Checks,Source Documents,Bills from Suppliers,Employee Earnings Records,C 2,An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.,The Account and its Analysis,The general ledger is a record containing all accounts used by the company.,C 3,=,The Account and its Analysis,C 3,Land,Equipment,Buildings,Cash,Notes Receivable,Supplies,Prepaid Accounts,Accounts Receivable,Asset Accounts,Asset Accounts,C 3,Accrued Liabilities,Unearned Revenue,Notes Payable,Accounts Payable,Liability Accounts,Liability Accounts,C 3,Equity Accounts,Revenues,Owners Equity,Owners Withdrawals,Expenses,Equity Accounts,C 3,Owners Capital,Liabilities,Equity,Assets,=,+,The Account and its Analysis,C 3,Ledger and Chart of Accounts,The ledger is a collection of all accounts for an information system. A companys size and diversity of operations affect the number of accounts needed.,The chart of accounts is a list of all accounts and includes an identifying number for each account.,C 4,A T-account represents a ledger account and is a tool used to understand the effects of one or more transactions.,Debits and Credits,C 5,Double-Entry Accounting,C 5,Double-Entry Accounting,Equity,C 5,Double-Entry Accounting,An account balance is the difference between the increases and decreases in an account. Notice the T-Account,C 5,Journalizing & Posting Transactions,Step 1: Analyze transactions and source documents.,P1,Journalizing Transactions,P1,T-accounts are useful illustrations, but balance column ledger accounts are used in practice.,Balance Column Account,P1,1,Identify the debit account in ledger.,Posting Journal Entries,P1,2,Enter the date.,Posting Journal Entries,P1,3,Enter the amount and description.,Posting Journal Entries,P1,4,Enter the journal reference.,Posting Journal Entries,P1,5,Compute the balance.,Posting Journal Entries,P1,Enter the ledger reference.,6,Posting Journal Entries,P1,Analyzing Transactions,Analysis:,Double entry:,101,301,Posting:,A1,Analyzing Transactions,Analysis:,Double entry:,A1,Analyzing Transactions,Analysis:,Double entry:,A1,Analyzing Transactions,Analysis:,Double entry:,A1,Analyzing Transactions,Analysis:,Double entry:,403,101,Posting:,A1,After processing its remaining transactions for December, FastForwards Trial Balance is prepared.,P2,Six Steps for Searching for and Correcting Errors,If the trial balance does not balance, the error(s) must be found and corrected.,Make sure the trial balance columns are correctly added.,Make sure account balances are correctly entered from the ledger.,See if debit or credit accounts are mistakenly placed on the trial balance.,Recompute each account balance in the ledger.,Verify that each journal entry is posted correctly.,Verify that each original journal entry has equal debits and credits.,P2,Using a Trial Balance to Prepare Financial Statements,Income Statement,Statement of Cash Flows,Statement of Owners Equity,Beginning Balance Sheet,Ending Balance Sheet,Period of Time,Point in Time,Point in Time,P3,Income Statement,P3,Statement of Owners Equity,P3,FASTFORWARD,Balance Sheet,P3,Describes the relationship between the amounts of the companys liabilities and assets. Helps to assess the risk that a company will fail to pay its debts.,Debt Ratio,A2,Chapter 3,Adjusting Accounts and Preparing Financial Statements,Conceptual Chapter Objectives,C1: Explain the importance of periodic reporting and the time period principle C2: Explain accrual accounting and how it improves financial statements C3: Identify the types of adjustments and their purpose,Analytical Chapter Objectives,A1: Explain how accounting adjustments link to financial statements A2: Compute profit margin and describe its use in analyzing company performance,Procedural Chapter Objectives,P1: Prepare and explain adjusting entries P2: Explain and prepare an adjusted trial balance P3: Prepare financial statements from an adjusted trial balance P4: Appendix A: Identify and explain alternatives in accounting for prepaids,1,2,3,4,5,6,7,8,9,10,11,12,1,2,3,4,Annually,1,2,Monthly,Quarterly,Semiannually,The Accounting Period,Jan,Feb,Mar,Apr,May,Jun,Jul,Aug,Sep,Oct,Nov,Dec,C 1,Accounting,Accrual Basis vs. Cash Basis,Accrual Basis Revenues are recognized when earned and expenses are recognized when incurred.,Cash Basis Revenues are recognized when cash is received and expenses recorded when cash is paid.,C 2,Accrual Basis vs. Cash Basis,On the cash basis the entire $2,400 would be recognized as insurance expense in 2007. No insurance expense from this policy would be recognized in 2008 or 2009, periods covered by the policy.,C 2,Accrual Basis vs. Cash Basis,On the accrual basis $100 of insurance expense is recognized in 2007, $1,200 in 2008, and $1,100 in 2009. The expense is matched with the periods benefited by the insurance coverage.,C 2,We have delivered the product to our customer, so I think we should record the revenue earned.,Recognizing Revenues & Expenses,Revenue Recognition,C 2,Revenue Recognition Matching,Now that we have recognized the revenue, lets see what expenses we incurred to generate that revenue.,C 1,Recognizing Revenues & Expenses,Adjustments,An adjusting entry is recorded to bring an asset or liability account balance to its proper amount.,Adjusting Accounts,Framework for Adjustments,*including depreciation,C 3,Here is the check for my first six months rent.,Adjusting Prepaid (Deferred) Expenses,Resources paid for prior to receiving the actual benefits.,P1,Prepaid Insurance,On December 1, 2007, Scott Company paid $12,000 for insurance for December 2007 through May 2008. Scott recorded the expenditure as Prepaid Insurance on December 1. What adjustment is required?,P1,Supplies,During 2007, Scott Company purchased $15,500 of supplies. Scott recorded the expenditures as Supplies. On December 31, a count of the supplies indicated $2,655 on hand. What adjustment is required?,P1,Adjusting for Depreciation,Depreciation is the process of computing expense from allocating the cost of plant and equipment over their expected useful lives.,P1,On January 1, 2007, Barton, Inc. purchased equipment for $62,000 cash. The equipment has an estimated useful life of five years and Barton expects to sell the equipment at the end of its life for $2,000 cash.Lets record depreciation expense for the year ended December 31, 2007.,P1,Adjusting for Depreciation,On January 1, 2007, Barton, Inc. purchased equipment for $62,000 cash. The equipment has an estimated useful life of five years and Barton expects to sell the equipment at the end of its life for $2,000 cash. Lets record depreciation expense for the year ended December 31, 2007.,P1,Adjusting for Depreciation,Equipment,Depreciation Expense,1/1 62,000,12/31 12,000,Accumulated Depreciation,12/31 12,000,P1,Adjusting for Depreciation,Equipment is shown net of accumulated depreciation.,$,P1,Adjusting for Depreciation,Adjusting Unearned (Deferred) Revenues,Cash received in advance of providing products or services.,Liability,Revenue,Unadjusted Balance,Credit Adjustment,Debit Adjustment,P1,On October 1, 2007, Ox University sold 1,000 season tickets to its 20 home basketball games for $100 each. Ox University makes the following entry:,P1,Adjusting Unearned (Deferred) Revenues,On December 31, Ox University has played 10 of its regular home games, winning two and losing eight.,P1,Adjusting Unearned (Deferred) Revenues,Were about one-half done with this job and want to be paid for our work!,Costs incurred in a period that are both unpaid and unrecorded.,Adjusting for Accrued Expenses,P1,Barton, Inc. pays its employees every Friday. Year-end, 12/31/07, falls on a Wednesday. As of 12/31/07, the employees have earned salaries of $47,250 for Monday through Wednesday. They will not be paid until the next Friday, 1/02/08.,P1,Adjusting for Accrued Expenses,Barton, Inc. pays its employees every Friday. Year-end, 12/31/07, falls on a Wednesday. As of 12/31/07, the employees have earned salaries of $47,250 for Monday through Wednesday of the week ended 1/02/08.,P1,Adjusting for Accrued Expenses,Yes, Ive completed your tax return, but have not had time to bill you yet.,Adjusting for Accrued Revenues,Revenues earned in a period that are both unrecorded and not yet received.,Asset,Revenue,Credit Adjustment,Debit Adjustment,P1,Adjusting for Accrued Revenues,Smith & Jones, CPAs, had $31,200 of work completed but not yet billed to clients. Lets make the adjusting entry necessary on December 31, 2007, the end of the companys fiscal year.,P1,Links to Financial Statements,A1,FastForward - Trial Balance - December 31, 2007,First, the initial unadjusted amounts are added to the worksheet.,P2,Next, FastForwards adjustments are added.,FastForward - Trial Balances - December 31, 2007,P2,Finally, the totals are determined.,FastForward - Trial Balance - December 31, 2007,P2,Preparing Financial Statements,Lets use FastForwards adjusted trial balance to prepare the companys financial statements.,P3,1. Prepare the Income Statement,P3,2. Prepare the Statement of Changes in Owners Equity.Note: Net Income from the Income Statement carries to the Statement of Changes in Owners Equity.,Preparation of Balance Sheet,Profit Margin,The profit margin ratio measures the companys net income to net sales.,A2,Chapter 4,Completing the Accounting Cycle,Conceptual Chapter Objectives,C1: Explain why temporary accounts are closed each period C2: Identify steps in the accounting cycle C3: Explain and prepare a classified balance sheet,Analytical Chapter Objectives,A1: Compute the current ratio and describe what it reveals about a companys financial condition,Procedural Chapter Objectives,P1: Prepare a worksheet and explain its usefulness P2: Describe and prepare closing entries P3: Explain and prepare a post-closing trial balance P4: Appendix 4A: Prepare reversing entries and explain their purpose,Benefits of a Work Sheet,Aids the preparation of financial statements.,Reduces possibility of errors.,Links accounts and their adjustments.,Assists in planning and organizing an audit.,Helps in preparing interim financial statements.,Shows the effects of proposed transactions.,Not a required report.,P1,FastForward Work Sheet