Accounting会计英语教程和训练

1、Accounting会计英语教程和训练Objectives of the CourseDevelop knowledge and understanding of the underlying principles, concepts and regulations relating to financial accounting Improve technical proficiency in the use of double entry techniquesLearning resourcesTextbook会计英语第四版，叶建芳 孙红星，上海财经大学出版社References Fund

2、amental Accounting Principles. (19th Edition) by John J. Wild, Ken W. Shaw, and Barbara ChiappettaAssessment of the CoursePart A: Class performance: 20%Class Attendance 10%Class Activities 10%Part B: Mid-term Examination: 30%Part C: Final Examination: 50%Chapter 1Introduction to AccountingContentsWh

3、at is accountingAccounting and its professionTypes of business ownershipGenerally accepted accounting principlesFinancial statements & accounting elements Accounting equationProfessional ethics in accounting What is accountingAccounting is the process of identifying, measuring, and communicating eco

4、nomic information to various users. -American Accounting Association AAA,1966Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organizations business activities.Users of Accounting InformationUsers o

5、f Accounting InformationManagers: make planning and control decisionsShareholders: make further investment decisionsLenders: evaluate the credibility of the business to make decisions on providing finance to the businessCustomers: ensure the quality of goods or service Government: know the resource

6、allocation in the whole economyTax authorities: make tax assessmentThe accounting professionThe accounting professionprivate accounting:employees working for businesses. Public accountingauditing and tax advice to a vast range of businesses. government accountingbusiness regulation and investigation

7、 of law violationsThe accounting professionProfessional organizations of accountantsAmerican Institute of Certified Public Accounts (AICPA)Chinese Institute of Certified Public Accounts (CICPA)Association of Chartered Certified Accountants (ACCA)Association of International Accountants (AIA)Types of

8、 Business ownershipTypes of BusinessPrimary industry：Agricultural, rural and mining Secondary industry: manufacturing and general processing of raw materialsTertiary industry: trading and service Trading: Wholesale, RetailService: Accountant, Architect, BankerTypes of Business ownershipSole traders

9、(Proprietorship)Formed and owned by a single person (proprietor,业主), who also manages the businessIt is an accounting entity but not a legal entityIn law, the proprietor is legally responsible for the business.In accounting, transactions of the proprietorship are accounted for separately from the ow

10、ners private affairsUnlimited liabilities: The proprietor is responsible for all debts by the business.The life of proprietorship ends when the owner either sells/closes down the business or at the owners death or incapacity.Types of Business ownershipPartnershipSimilar to Proprietorship except that

11、 there are two or more owners who jointly own the business in predetermined proportions.It brings together the resources and talents of two or more peopleUnlimited liability：Each partner is personally liable for all the debts of the partnershipPartners share all the profits and bear all losses accor

12、ding to the terms of the partnership agreementA partnership is terminated when ownership changes through the retirement or death of a partnerTypes of Business ownershipCorporationA company is an artificial body created through law and owned by shareholdersA company is a separate legal entity and is

13、able to conduct business in the companys namePerpetual succession: its existence is unaffected by changes in the ownership of shares in the companyManagement and ownership are usually separatedA Board of Directors is elected to run the business on behalf of the shareholdersComparison of the three bu

14、siness formsProprietorshipPartnershipCorporationOwnersProprietorone ownerPartnerstwo or more ownersShareholdersmany ownersLife of entitylimited by owners choice or deathlimited by owners choice or deathIndefinitePersonal liability of owner(s) for business debtsProprietor is personally liablePartners

15、hip are personally liableShareholders are not personally liableAdvantages & DisadvantagesAdvantagesDisadvantagesProprietorshipManagement and ownership by the same personUnlimited liability for all debtsSubject to less strict government regulationsUnsecured finance may be difficult to obtainPartnersh

16、ipGreater opportunity because of combined expertise Unlimited liability for all debtsGreater Access to capitalPossible disputes between partnersSubject to less strict government regulationsPartnership has to be reformed each time there is a change in the composition of partnersCorporationLimited lia

17、bilities of shareholdersHigh establishment costsPerpetual successionSubject to strict government regulationEasier access to financeGenerally Accepted Accounting PrinciplesFinancial accounting practice is governed by concepts and rules known as generally accepted accounting principles (GAAP).GAAP aim

18、s to make information in financial statements relevant, reliable, and comparable.Relevant information affects the decisions of its users. Reliable information is trusted by users.Comparable information is helpful in contrasting organizations.Generally Accepted Accounting PrinciplesRevenue Recognitio

19、nMatchingFull DisclosureConsistencyMaterialityConservatismBusiness entityObjectivityCost Going ConcernMonetary UnitTime PeriodBasic Accounting PrinciplesBusiness Entity Principle（会计主体）A business entity is an organization or section of organization that stands apart as a separate economic unitThe bus

20、iness is considered separate and distinct from the owner(s) of the businessTransactions are recorded from the point of view of business, not from the owner(s) or any other businessBasic Accounting PrinciplesObjectivity Principle（客观性）Accounting should be objective or unbiased.Accounting information s

21、hould be free from bias and personal judgmentAccounting records are based on information that flows from activities documented by objective evidence (invoice, receipts, etc) rather than on subjective judgments.Suppose you want to buy a small building. You believe it is worth $155000, two real estate

22、 professionals appraise it at $147000.The owner demands $160000 and you pay that price. What price should be recorded by the objectivity principle?$160000The objective evidence of a completed transaction supports the price of $160000Basic Accounting PrinciplesCost Principle（成本原则）Accounting informati

23、on is based on actual cost (with a potential for subsequent adjustments to market)Cost is measured on a cash or equal-to-cash basis.Implicit assumption: Stable-monetary-unit(币值稳定）, the dollars purchasing power is relatively stableA company bought an car at $100,000 one year ago, and now the price dr

24、ops and the car can be sold for $80,000. What should be the accounting value of the car one year ago and what is now? One year ago: $100000Now: $100000Basic Accounting PrinciplesGoing Concern Principle（持续经营）The business is assumed to continue operating instead of being closed or sold.Costs are sprea

25、d into the future for as long as the asset will be used in the businessAssets are reported at cost instead of liquidation values that assume closure.Basic Accounting PrinciplesMonetary Unit Principle （货币计量）Transactions must be recorded based in common units of moneyIt is also assumed that the unit o

26、f money is stable so that inflationary or deflationary trends are not adjusted for; the original amounts recorded stand.Basic Accounting PrinciplesTime Period Principle （会计分期）The life of a company can be divided into equal time periods, and financial reports are prepared for those periods.The time p

27、eriods covered by financial reports are called accounting periods An company usually uses one year as its primary accounting period.Periodic reports at regular intervals ensures that decision makers obtain timely information. Basic Accounting PrinciplesRevenue Recognition Principle （收入确认）Revenue is

28、recognized when earned regardless of when cash is received.Revenue is recorded when earned.The earnings process is complete when services are performed or a seller transfers ownership of products to the buyer.Proceeds from selling products and services need not be in cash， e.g. credit sales.Revenue

29、is measured by the cash received plus the cash value of any other items received.Basic Accounting PrinciplesMatching Principle（配比）Accounting reports should match against revenue of all the cost (expenses) incurred in earning that revenue regardless of when they are paidExpenses should be reported in

30、 the same accounting period as revenues that were earned as a result of those expenses.A client pays Air & Sea $900 on March 15 for service to be performed from April 1 to June 30. Has Air & Sea earned revenue on March 15?Air & Sea pays $4500 on July 31 for office rent for the next 3 months. Has the

31、 company incurred expense on July 31?Basic Accounting PrinciplesFull Disclosure Principle（充分披露）Financial statements and their accompanying notes include all relevant information about the operations, financial position of the entity.All material and relevant information should be communicated to use

32、rs in financial reports.A business might be involved in litigation, the contingent (possible) liability must be disclosed, as its suppression could materially affect investment decisions by usersBasic Accounting PrinciplesConsistency Principle（一致性）A business should use the same accounting methods an

33、d procedures from period to periodAn accounting method once adopted should not be changed during an accounting period.Consistency helps to see the trends in financial position and make comparisons unclouded by changes in accounting methodA significant change and its monetary effect must be fully dis

34、closed in the financial reports Basic Accounting PrinciplesMateriality Principle（重要性）There should be disclosure of any information which is likely to influence any decision based on the accounting reportsAn amount may be ignored if their effects on the financial statements is not important to users.

35、 Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statementsContext matters: what is relevant to a small shop might be immaterial to a major corporationBasic Accounting PrinciplesConservatism Principle（谨慎）The

36、least optimistic estimate should be selected if two or more alternatives are available.Prudence is to be used when judgments or estimates are unavoidable. When risk or uncertainty exists, the preference for possible accounting measurement errors should be in the direction of understatement rather th

37、an overstatement of assets and income.Financial StatementsBalance sheet (Statement of financial position)Income statementStatement of cash flowsStatement of Owners EquityBalance Sheet （资产负债表）Balance Sheet: a list of all assets owned and all the liabilities owed by a business at a specific point in t

38、ime.Assets:（资产） resources controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity Tangible assets and intangible assetsCurrent assets and non-current assetsLiabilities（负债）: creditors claims on assets.Present obligations of the ent

39、ity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.Equity（权益）: owners claim on assets. It is the amounts invested in a business by the owner.equity =assets-liabilities Income Statement（利润表）Income statemen

40、t is a record of income generated and expenditure incurred over a given period.Shows whether the business has a profit or loss over a periodRevenue（收入） : the income generated by the business for a period.increases in economic benefits during the accounting period in the form of inflows or enhancemen

41、ts of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.Income StatementExpenses（费用） are the costs of running the business for the same period.decreases in economic benefits during the accounting period in the f

42、orm of outflows or depletions of assets or incurring of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.Net profit/Net income: the excess of revenues over expenses for that timeNet Loss: the excess of expenses over revenues for that t

43、imeStatement of Owners Equity（所有者权益表）The statement of owners equity （statement of retained earnings） reports information about how equity changes over the reporting period. The statement of owners equity lists：beginning capital events that increase it : owner investments and net incomeevents that de

44、crease it : owner withdrawals(提取) and net loss.Ending capital Ending capital is carried over and reported on the balance sheet.Statement of Cash Flows(现金流量表)Statement of cash flows lists the cash inflows and outflows from operating activities, investing activities, and financing activities over a pe

45、riod.Operating activities: cash flows related to revenues and expenses of the business tradingInvesting activities: cash flows related to increases and decreases in the non-current assetsFinancing activities: cash flows related to the funding of the business by owners and lendersFinancial Statements

46、 and Their LinksNet income is used to compute equityOwner capital is used to prepare the balance sheet. Cash from the balance sheet is used to reconcile the statement of cash flows.A single ruled line denotes an addition or subtraction. Final totals are double underlined. Negative amounts are often

47、in parentheses.The accounting equation（会计等式）Accounting equation Assets= Liabilities + Owners EquityEvery transaction affects at least two elements in the accounting equation. The accounting equation remain in balance after each transaction.Owners equity is directly affected by revenues, expenses, ow

48、ners capital and owners withdrawals.The expanded accounting equationThe Accounting EquationChanges of two elementsAny increase (decrease) in Assets must be accompanied by a corresponding increase (decrease) in either Liabilities or Owners EquityChanges within one elementAny increase (decrease) in on

49、e type of Assets（Liabilities /Owners Equity）must be accompanied by a corresponding decrease (increase) in another type of Assets（Liabilities /Owners Equity）If the Assets doesnt changeAny increase (decrease) in Liabilities must be accompanied by a corresponding decrease (increase) in Owners EquityAny

50、 increase (decrease) in Owners Equity must be accompanied by a corresponding decrease (increase) in LiabilitiesStockholders Equity+10,0001.+10,000CashAccounts ReceivableEquipmentAccounts PayableCommon Stock+=+1. Stockholders invested $10,000 cash to start the repair shop.Owners capitalAssetsLiabilit

51、iesThe accounting equation Barones Repair Shop was started on May. Prepare a tabular analysis of the following transactions for the month of May.42+10,0001.+10,0002. Purchased equipment for $5,000 cash.-5,0002.+5,000OwnersCapitalStockholders EquityCashAccounts ReceivableEquipmentAccounts PayableComm

52、on Stock+=+AssetsLiabilities43+10,0001.+10,0003. Paid $400 cash for May office rent.-5,0002.+5,000-4003.-400Stockholders EquityCashAccounts ReceivableEquipmentAccounts PayableCommon Stock+=+AssetsLiabilitiesRetained EarningsExpense+44+10,0001.+10,000-5,0002.+5,000-4003.-400Stockholders EquityCashAcc

53、ounts ReceivableEquipmentAccounts PayableCommon Stock+=+AssetsLiabilitiesRetained Earnings+5,1004.+5,1004. Received $5,100 from customers for repair service.Revenue+45+10,0001.+10,000-5,0002.+5,000-4003.-400Stockholders EquityCashAccounts ReceivableEquipmentAccounts PayableCommon Stock+=+AssetsLiabilitiesRetained Earnings+5,1004.+5,1005. Paid dividends of $1,000 cash.-1,0005.-1,000+46+10,0001.+10,000-5,0002.+5,000-4003.-400Stockholders EquityCashAccounts ReceivableEquipmentAccounts PayableCommon Stock+=+AssetsLiabilitiesRetained Earnings+5,1004.