会计基础horngrenacct7ch.ppt

Copyright 2007 Prentice-Hall. All rights reserved Accounting and the Business Environment Chapter 1 1 Copyright 2007 Prentice-Hall. All rights reserved Types of Business Organizations P A business is owned by a single individual. P A business is owned by two or more owners. C A business is owned by stockholders. 2 Copyright 2007 Prentice-Hall. All rights reserved Types of Business Organizations Proprietorships A business is owned by a single individual. Partnerships A business is owned by two or more owners. Corporations A business is owned by stockholders. 3 Copyright 2007 Prentice-Hall. All rights reserved Corporations What are some advantages? separate l existence l l of stockholders transferability of ownership relatively easy What are some disadvantages? t possible d taxation e governmental regulation 4 Copyright 2007 Prentice-Hall. All rights reserved Corporations What are some advantages? separate legal existence limited liability of stockholders transferability of ownership relatively easy What are some disadvantages? taxes possible double taxation extensive governmental regulation 5 Copyright 2007 Prentice-Hall. All rights reserved * Proprietorships and partnerships that are set up as LLCs provide limited liability. Characteristics of Businesses * * 6 Copyright 2007 Prentice-Hall. All rights reserved * Proprietorships and partnerships that are set up as LLCs provide limited liability. Characteristics of Businesses * * 7 Copyright 2007 Prentice-Hall. All rights reserved GAAP Generally Accepted Accounting Principles Accounting g that govern how accountants measure, process, and communicate financial information Formulated by F A Standards B (FASB) Issues S of F Accounting S , SFAS and Interpretations. 8 Copyright 2007 Prentice-Hall. All rights reserved GAAP Generally Accepted Accounting Principles Accounting guidelines that govern how accountants measure, process, and communicate financial information Formulated by Financial Accounting Standards Board (FASB) Issues Statements of Financial Accounting Standards, SFAS and Interpretations. 9 Copyright 2007 Prentice-Hall. All rights reserved Entity Concept Accounting Entity organization that stands apart as a s e unit 10 Copyright 2007 Prentice-Hall. All rights reserved Entity Concept Accounting Entity organization that stands apart as a separate economic unit 11 Copyright 2007 Prentice-Hall. All rights reserved Information must be reasonably a . Information must be f from bias. Information must report what actually h . Individuals would arrive at s conclusions using s data. The Reliability (Objectivity) Principle Accounting information is based on the most r data available 12 Copyright 2007 Prentice-Hall. All rights reserved 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. The Reliability (Objectivity) Principle Accounting information is based on the most reliable data available 13 Copyright 2007 Prentice-Hall. All rights reserved Assets and services a should be recorded at their a c (h c ). The Cost Principle 14 Copyright 2007 Prentice-Hall. All rights reserved Assets and services acquired should be recorded at their actual cost (historical cost). The Cost Principle 15 Copyright 2007 Prentice-Hall. All rights reserved Assumes that the e will remain in o for the f future The Going Concern Concept 16 Copyright 2007 Prentice-Hall. All rights reserved Assumes that the entity will remain in operation for the foreseeable future The Going Concern Concept 17 Copyright 2007 Prentice-Hall. All rights reserved Stable-Monetary-Unit Concept Assumes that the dollars p p is stable 18 Copyright 2007 Prentice-Hall. All rights reserved Stable-Monetary-Unit Concept Assumes that the dollars purchasing power is stable 19 Copyright 2007 Prentice-Hall. All rights reserved A corporation with 2 stockholders goes bankrupt owing $10,000. How much does each stockholder owe the creditors? Answer: $0. The stockholders of a corporation have limited liability, which means that stockholders are not responsible for the debts of the corporation. 20 Copyright 2007 Prentice-Hall. All rights reserved A company purchases land for $10,000. An appraiser values the land at $12,000, and the county assesses the value at $9,000 for tax purposes. At which amount should the company record the land? A. $ 9,000 B. $10,000 C. $12,000 D. The company may choose any of the three values. 2121 Copyright 2007 Prentice-Hall. All rights reserved A company purchases land for $10,000. An appraiser values the land at $12,000, and the county assesses the value at $9,000 for tax purposes. At which amount should the company record the land? A. $ 9,000 B. $10,000 C. $12,000 D. The company may choose any of the three values. 2222 Copyright 2007 Prentice-Hall. All rights reserved Lisa Smith owns a consulting business. Her personal residence is listed on the company financial statements. Which accounting principle does this violate? A. Cost B. Going concern C. Reliability D. Entity 2323 Copyright 2007 Prentice-Hall. All rights reserved Lisa Smith owns a consulting business. Her personal residence is listed on the company financial statements. Which accounting principle does this violate? A. Cost B. Going concern C. Reliability D. Entity 2424 Copyright 2007 Prentice-Hall. All rights reserved Objective 3 Use the accounting equation 25 Copyright 2007 Prentice-Hall. All rights reserved Economic Resources Claims to Economic Resources The Accounting Equation Assets= Liabilities + Owners Equity 26 Copyright 2007 Prentice-Hall. All rights reserved Assets Economic resources, expected to benefit the business in the future Cash Accounts receivable Merchandise inventory Furniture Land 27 Copyright 2007 Prentice-Hall. All rights reserved Claims to the Assets Liabilities economic obligations payable to an individual or organization outside the business Accounts payable Notes payable Salary payable 28 Copyright 2007 Prentice-Hall. All rights reserved Liability What is a liability? It is something a company owes. money service legal retainers product magazines 29 Copyright 2007 Prentice-Hall. All rights reserved Claims to the Assets Owners Equity (capital) claim of business owner to the assets of the business It is whats left of the assets after liabilities have been deducted. the same as net assets the owners claim on the entitys assets 30 Copyright 2007 Prentice-Hall. All rights reserved Economic Resources Claims to Economic Resources The Accounting Equation Assets= Liabilities + Owners Equity 31 Copyright 2007 Prentice-Hall. All rights reserved Exercise 1-18 AssetsLiabilitiesOwners Equity Pep Boys$ ?$60,000$21,000 Eddie Bauer?40,000 Benbrook Exxon 100,00079,000? $81,000 32,000 21,000 $72,000 32 Copyright 2007 Prentice-Hall. All rights reserved Transactions that Affect Owners Equity OWNERS EQUITY INCREASES OWNERS EQUITY DECREASES Owner Investments RevenuesExpenses Owner Withdrawals Owners Equity 33 Copyright 2007 Prentice-Hall. All rights reserved Investments are the assets the owner puts in the business 34 Copyright 2007 Prentice-Hall. All rights reserved are withdrawals of cash or other assets by the owner for personal use decrease owners equity DrawingsDrawings 35 Copyright 2007 Prentice-Hall. All rights reserved Revenues Amounts earned by delivering goods or services to customers Sales revenue Service revenue Interest revenue Dividend revenue 36 Copyright 2007 Prentice-Hall. All rights reserved Expenses Decrease in owners equity that occurs from using assets or increasing liabilities in the course of delivering goods or services to customers Salary expense Rent expense Utilities expense Interest expense 37 Copyright 2007 Prentice-Hall. All rights reserved One item is omitted in each of the following summaries of balance sheet and income statement data for three different sole proprietorships, X, Y, and Z. Determine the amounts of the missing items, identifying each proprietorship by letter. Proprietorship X Y Z Beginning of the Year: Assets$400,000$150,000$199,000 Liabilities 250,000 105,000 168,000 End of the Year: Assets 450,000 195,000 195,000 Liabilities 280,000 95,000 169,000 During the Year: Additional Investment by the owner ? 79,000 80,000 Withdrawals by the owner 90,000 83,000 ? Revenue 195,000 ? 187,000 Expenses 170,000 113,000 185,000 38 Copyright 2007 Prentice-Hall. All rights reserved Objective 4 Analyze business transactions 39 Copyright 2007 Prentice-Hall. All rights reserved Transaction An event that affects the financial position of a particular entity and can be recorded reliably 40 Copyright 2007 Prentice-Hall. All rights reserved Exercise 1-17 Increased assets (cash) No effect on total assets Decreased assets (cash) Increased assets (equipment) 41 Copyright 2007 Prentice-Hall. All rights reserved Exercise 1-17 Increased assets (accounts receivable) Decreased assets (cash) No effect on total assets Increased assets (cash) 42 Copyright 2007 Prentice-Hall. All rights reserved DateAssetsLiabilitiesOwners Equity JulyCashMedical Supplies LandAccounts Payable M.Lange, Capital Type of Transaction Exercise 1-22 45,000 Investment Assets = $45,000 Liabilities & Owners Equity = $45,000 45,0006 43 Copyright 2007 Prentice-Hall. All rights reserved DateAssetsLiabilitiesOwners Equity JulyCashMedical Supplies LandAccounts Payable M.Lange, Capital Type of Transaction Exercise 1-22 45,000 Investment 35,000 Assets = $45,000 Liabilities & Owners Equity = $45,000 45,0006 -35,0009 45,00035,00010,000Bal 44 Copyright 2007 Prentice-Hall. All rights reserved DateAssetsLiabilitiesOwners Equity JulyCashMedical Supplies LandAccounts Payable M.Lange, Capital Type of Transaction Exercise 1-22 2,000 Assets = $47,000 Liabilities & Owners Equity = $47,000 2,00012 45,00035,00010,000Bal 45,00035,00010,000Bal2,0002,000 45 Copyright 2007 Prentice-Hall. All rights reserved DateAssetsLiabilitiesOwners Equity JulyCashMedical Supplies LandAccounts Payable M.Lange, Capital Type of Transaction Exercise 1-22 Assets = $54,000 Liabilities & Owners Equity = $54,000 7,00015-317,000Revenue 52,00035,00017,000Bal2,0002,000 45,00035,00010,000Bal2,0002,000 46 Copyright 2007 Prentice-Hall. All rights reserved DateAssetsLiabilitiesOwners Equity JulyCashMedical Supplies LandAccounts Payable M.Lange, Capital Type of Transaction Exercise 1-22 Assets = $51,000 Liabilities & Owners Equity = $51,000 52,00035,00017,000Bal2,0002,000 -1,70015-31-1,700Salaries Exp -1,000Rent Exp-1,000 - 300Utilities Exp- 300 49,00035,00014,000Bal2,0002,000 47 Copyright 2007 Prentice-Hall. All rights reserved DateAssetsLiabilitiesOwners Equity JulyCashMedical Supplies LandAccounts Payable M.Lange, Capital Type of Transaction Exercise 1-22 Assets = $51,000 Liabilities & Owners Equity = $51,000 500 28 -500 49,00035,00014,500Bal2,0001,500 49,00035,00014,000Bal2,0002,000 48 Copyright 2007 Prentice-Hall. All rights reserved DateAssetsLiabilitiesOwners Equity JulyCashMedical Supplies LandAccounts Payable M.Lange, Capital Type of Transaction Exercise 1-22 Assets = $49,500 Liabilities & Owners Equity = $49,500 -1,500 31 -1,500 49,00035,00014,500Bal2,0001,500 49,00035,00013,000Bal 5001,500 49 Copyright 2007 Prentice-Hall. All rights reserved Objective 5 Prepare financial statements Evaluate business performance Objective 6 50 Copyright 2007 Prentice-Hall. All rights reserved Financial Statements Income statement Statement of owners equity Balance sheet Statement of cash flows 51 Copyright 2007 Prentice-Hall. All rights reserved Income Statement Summary of an entitys revenues, expenses, and net income or net loss for a specific period Revenues - Expenses Net Income: Revenues Expenses Net Loss: Expenses Revenues 52 Copyright 2007 Prentice-Hall. All rights reserved Statement of Owners Equity Summary of changes in an entitys owners equity during a specific period Beginning owners equity + Owners investments + Net income - Net loss - Owners withdrawals Ending owners equity 53 Copyright 2007 Prentice-Hall. All rights reserved Balance Sheet Reports the entitys assets, liabilities, and owners equity as of a specific date Assets = Liabilities + Owners Equity 54 Copyright 2007 Prentice-Hall. All rights reserved Statement of Cash Flows Reports cash receipts and cash payments during a period (covered in Chapter 17) 55 Copyright 2007 Prentice-Hall. All rights reserved Maria Lange, M.D. Income Statement For the Month Ended July 31, 2006 Revenue: Fees earned $7,000 Expenses: Salary expense $1,700 Rent expense1,000 Utilities expense300 Total Expenses 3,000 Net income $4,000 56 Copyright 2007 Prentice-Hall. All rights reserved Maria Lange, capital, July 1, 2006$ 0 Add: Investment by owner45,000 Net income for the month4,000 Subtotal$49,000 Less: Withdrawals by owner 0 Maria Lange, capit