会计学原理-英文版-第21版--第一章Accounting-in-Bussiness

1、1 - 1PowerPoint Authors:Susan Coomer Galbreath, Ph.D., CPACharles W. Caldwell, D.B.A., CMAJon A. Booker, Ph.D., CPA, CIACynthia J. Rooney, Ph.D., CPACopyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Accounting in BusinessChapter 11 - 2Accounting in BusinessC11 - 3Importance of Ac

2、countingC1For example, the sale by Apple of an iPhone.Keep a chronological log of transactions.Prepare reports such as financial statements.1 - 4Users of Financial InformationC1Accounting is called the language of business because all organizations set up an accounting information system to communic

3、ate data to help people make better decisions. Accounting serves many users who can be divided into two groups: external users and internal users.1 - 5Opportunities in AccountingAccounting information is in all aspects of our lives. When we earn money, pay taxes, invest savings, budget earnings, and

4、 plan for the future, we use accounting.1 - 6Ethics A Key ConceptC3The goal of accounting is to provide useful information for decisions. For information to be useful, it must be trusted. This demands ethics in accounting. Ethics are beliefs that distinguish right from wrong. They are accepted stand

5、ards of good and bad behavior.1 - 7Fraud TriangleC3Three factors must exist for a person to commit fraud: opportunity, pressure, and rationalization.Envision a way to commit fraud with a low perceived risk of getting caughtFails to see the criminal nature of the fraud or justifies the actionMust hav

6、e some pressure to commit fraud, like unpaid bills1 - 8Generally Accepted Accounting Principles (GAAP)C4Financial accounting is governed by concepts and rules known as generally accepted accounting principles (GAAP). GAAP aims to make information relevant, reliable, and comparable. Relevant informat

7、ion affects decisionsof users. Reliable information is trusted by users. Comparable information is helpful in contrasting organizations.1 - 9International StandardsC4In todays global economy, there is increased demand by external users for comparability in accounting reports. This demand often arise

8、s when companies wish to raise money from lenders and investors in different countries. Differences between U.S. GAAP and IFRS are decreasing as theFASB and IASB pursue a convergence process aimed to achieve a single set of accounting standards for global use.International Accounting Standards Board

9、 (IASB) An independent group (consisting of individuals from many countries), issues International Financial Reporting Standards (IFRS)International Financial Reporting Standards (IFRS) Identify preferred accounting practices 1 - 10Conceptual Framework and ConvergenceC41 - 11Principles and Assumptio

10、ns of AccountingC4General principles are the basic assumptions, concepts, and guidelines for preparing financial statements. General principles stem from long-used accounting practices. Specific principles are detailed rules used in reporting business transactions and events. Specific principles ari

11、se more often from the rulings of authoritative groups.1 - 12Accounting PrinciplesC4Cost PrincipleAccounting information is based on actual cost. Actual cost is considered objective.Matching PrincipleA company must record its expenses incurred to generate the revenue reported.Full Disclosure Princip

12、leA company is required to report the details behind financial statements that would impact users decisions.Revenue Recognition Principle1. Recognize revenue when it is earned.2. Proceeds need not be in cash.3. Measure revenue by cash received plus cash value of items received. 1 - 13Accounting Assu

13、mptionsMonetary Unit AssumptionExpress transactions and events in monetary, or money, units.Business Entity AssumptionA business is accounted for separately from other business entities, including its owner.Time Period AssumptionPresumes that the life of a company can be divided into time periods, s

14、uch as months and years.NowFutureGoing-Concern AssumptionReflects assumption that the business will continue operating instead of being closed or sold.C41 - 14Proprietorship, Partnership, and CorporationHere are some of the major attributes of proprietorships, partnerships, and corporations:C41 - 15

15、SarbanesOxley (SOX)Congress passed the SarbanesOxley Act to help curb financial abuses atcompanies that issue their stock to the public. SOX requires that these public companies apply both accounting oversight and stringent internal controls. The desired results include more transparency, accountabi

16、lity, and truthfulness in reporting transactions.C41 - 16Dodd-Frank Wall Street Reform and Consumer Protection ActThe Act was designed to:1.promote accountability and transparency in the financial system,2.put an end to the notion of “too big to fail,” 3.protect the taxpayer by ending bailouts, and4

17、.protect consumers from abusive financial services.1 - 17Transaction Analysis and the Accounting Equation The Accounting EquationExpanded Accounting Equation:A1Net Income1 - 18P1Transaction AnalysisTransaction 1On December 1, Chas Taylor personally invests $30,000 cash in FastForward and deposits th

18、e cash in a bank account opened under the name of FastForward.The accounts involved are:(1) Cash (asset)(2) Owner Capital (equity)1 - 19P1Transaction AnalysisTransaction 2FastForward uses $2,500 of its cash to buy supplies of brand name footwear for performance testing over the next few months.The a

19、ccounts involved are:(1) Cash (asset)(2) Supplies (asset)1 - 20P1Transaction AnalysisTransaction 3FastForward spends $26,000 to acquire equipment for testing footwear. This is an exchange of one asset, cash, for another asset, equipment. The equipment is an asset because of its expected future benef

20、its from testing footwear.The accounts involved are:(1) Cash (asset)(2) Equipment (asset)1 - 21P1Transaction AnalysisTransaction 4Taylor decides more supplies of footwear and accessories are needed. These additional supplies total $7,100, but as we see from the accounting equation, FastForward has o

21、nly $1,500 in cash. Taylor arranges to purchase them on credit from CalTech Supply Company. The accounts involved are:(1) Supplies (asset)(2) Accounts Payable (liability)1 - 22P1Transaction AnalysisTransaction 5In one of its first jobs, FastForward provides consulting services to a powerwalking club

22、 and immediately collects $4,200 cash.The accounts involved are:(1) Cash (asset)(2) Revenues (equity)1 - 23P1Transaction AnalysisTransaction 6 and 7FastForward pays $1,000 rent and the biweekly $700 salary of the companys only employee.The accounts involved are:(1) Cash (asset)(2) Expenses (equity)1

23、 - 24P1Transaction AnalysisTransaction 8FastForward provides consulting services of $1,600 and rents its test facilities for $300 to a podiatric services center. The center is billed for the $1,900 total. This transaction results in a new asset, called accounts receivable, from this client.The accou

24、nts involved are:(1) Accounts Receivable (asset)(2) Revenues (equity)1 - 25P1Transaction AnalysisTransaction 9The podiatric center pays $1,900 to FastForward 10 days after it is billed for consulting services.The accounts involved are:(1) Cash (asset)(2) Accounts Receivable (asset)1 - 26P1Transactio

25、n AnalysisTransaction 10FastForward pays CalTech Supply $900 cash as partial payment for its earlier $7,100 purchase of supplies, leaving $6,200 unpaid.The accounts involved are:(1) Cash (asset)(2) Accounts Payable (liability)1 - 27P1Transaction AnalysisTransaction 11The owner of FastForward withdra

26、ws $200 cash for personal use.The accounts involved are:(1) Cash (asset)(2) Withdrawals (equity)1 - 28Summary of TransactionsP11 - 29Financial StatementsThe four financial statements and their purposes are:1. Income statement describes a companys revenues and expenses along with the resulting net in

27、come or loss over a period of time due to earnings activities.2. Statement of owners equity explains changes in equity from net income (or loss) and from any owner investments and withdrawals over a period of time.3. Balance sheet describes a companys financial position (types and amounts of assets,

28、 liabilities, and equity) at a point in time.4. Statement of cash flows identifies cash inflows (receipts) and cash outflows (payments) over a period of time.P21 - 30Income StatementThe income statement describes a companys revenues and expenses along with the resulting net income or loss over a per

29、iod of time due to earnings activities.P21 - 31Statement of Owners EquityNet income from the income statement.The statement of owners equity reports information about how equity changes over the reporting period. P21 - 32Balance SheetThe balance sheet describes a companys financial position at a poi

30、nt in time.P21 - 33Statement of Cash FlowsP21 - 34Global ViewBasic PrinciplesNeither U.S. GAAP nor IFRS specifies particular account names nor the detail required. IFRS does require certain minimum line items be reported in the balance sheet along with other minimum disclosures that U.S. GAAP does n

31、ot. On the other hand, U.S. GAAP requires disclosures for the current and prior two years for the income statement, statement of cash flows, and statement of retained earnings (equity), while IFRS requires disclosures for the current and prior year. Still, the basic principles behind these two syste

32、ms are similar.1 - 35Global ViewTransaction AnalysisBoth U.S. GAAP and IFRS apply transaction analysis identically as shown in this chapter. Although some variations exist in revenue and expense recognition and other principles, all of the transactions in this chapter are accounted for identically u

33、nder these two systems. It is often said that U.S. GAAP is more rules-based whereas IFRS is more principles-based. The main difference on the rules versus principles focus is with the approach in deciding how to account for certain transactions. Under U.S. GAAP, the approach is more focused on strictly following the accounting rules; under IFRS, the approach is more focused on a review of the situation and how accounting can best reflect it.1 - 36Global ViewFinancial StatementsBoth U.S. GAAP and IFRS prepare the same four basic finan