基础会计英语备课笔记

备课笔记Chapter1GeneralIntroductiontoAccounting1.Objectives:1.Tounderstandthedefinitionofaccounting;2.Toidentifytheaccountingentityanditsbasicforms;3.Toknowthefunctions,targets,postulatesandbasesofaccounting.Answerthefollowingquestions.1)Howtodescribethedefinitionofaccounting?2)Whatarethefunctionsandtargetsofaccounting?3)Canyouillustratethedifferencesbetweenaccrualbasisandcashbasisofaccounting?IntroductionAccountingaroseinhistoryaftertheconceptofnumberscameintobeing,anddevelopedrapidlytosatisfypeople’sneedsforproductionandmanagement.Peoplestudythenatureofaccountingfromdifferentangles,andgivedifferentdefinitionsofaccounting.Inmodernsociety,accounting,akindofmanagement,1.1 DefinitionofAccountingTheAmericanInstituteofCertifiedPublicAccountant(AICPA)definedaccountingas“theartofrecording,classifying,summarizinginasignificantmannerandintermsofmoney,transactionsandeventswhichare,inpartatleast,ofafinancialcharacter,andinterpretingtheresultsthereof”.Somedefinitionsfocusonaccountingfunctionsofinformationservice.Forexample,Encyclopediadefinesaccountingas“theprocessofmaintaining,auditing,andprocessingfinancialinformationforbusinesspurposes”.Accountingisalsodefinedas“aninformationsystemthatmeasures,processes,andcommunicatesfinancialinformationaboutanidentifiableeconomicentity”.1.2AccountingEntitySoleProprietorshipsAnenterpriseownedbyonepersoniscalledasoleorsingleproprietorship,andtheowneroftenactsasthemanager.Thisformofbusinessorganizationiscommonforsmallretailstoresandservicebusiness,farms,andprofessionalpracticeinlaw,medicine,andpublicaccounting,especiallyprevalentinhandicrafts,agriculture,forestry,andfisheryandfamilyworkshops.PartnershipsApartnershipissetupbytwoormoreownerswhowishtocombinecapitalormanagerialtalentsforsomecommonbusinesspurpose.Itisnotanincorporatedbusiness，andisdifferentinmanywaysfromotherformsofbusiness.Inaccounting,partnershipsareconsideredasseparateentitiesfromtheowners.CorporationsAcorporationisaseparateentityorganizedbylawandindependentoftheowners.Usually,acorporationhasitsownassetsandliabilities.Itshouldtakeresponsibilityforitsownprofitsandlosses,soitismainlyorganizedintheformofLimitedLiabilityCompanyorJointStockLimitedCompany.1.3FunctionsandTargetsofAccountingFunctionsInAccountingLawofthePeople'sRepublicofChina,accountingofficesandaccountingpersonnelshallconductaccountingpracticeandexerciseaccountingsupervisioninaccordancewiththeLaw.Theyareinterrelatedtoeachotherandindependentmutually,andalwaysfunctionthroughoutanyaccountingactivity.TargetsThepurposeexpectedtoachieveinaccountingworkisthetargetofaccounting.Itistheinherentrequirementsofaccountingandguidesaccountingpracticeinacorrectdirection.1.4PostulatesandBasesofAccountingAccountingEntityAssumption：Allkindsofbusinessconcernsareconceivedandtreatedforaccountingpurposesasaseparateentity,separateanddistinctfromitsownersandfromotherconcerns.Generallyspeaking,alegalentitymustbeanaccountingentity,butnotalloftheaccountingentitiesarelegalentities.GoingConcernAssumption：Goingconcernisaboutaccountingtime.Mostaccountingmethodsarebasedontheassumptionthatthebusinessenterprisewillhavealonglife.Thegoing-concernconceptholdsthattheentitywillremaininoperationfortheforeseeablefuture.Mostassets,i.e.,thefirm’sresources,suchassupplies,land,buildingsandequipment,areacquiredforuseratherthanforsale.AccountingPeriodAssumption：Lifeofabusinessoftenlastmanyyearsanditsactivitiesgoonwithoutinterruptionovertheyears.Theaccountingperiodortimeperiodassumptionimpliesthattheeconomicactivitiesofanenterprisecanbedividedintoartificialtimeperiodsofequallength.AccountingBasesCashbasis:Incash-basisaccounting,accountantsrecordatransactiononlywhencashisreceivedorpaid.Cashreceiptsaretreatedasrevenueandpaymentsarehandledasexpenses.Cash-basisdoesnotemphasizethematchingprinciple(i.e.,Itrequiresthatrevenueandexpensesshouldbematched.).Accrualbasis:Inaccrual-basisaccounting,accountantsrecognizetheimpactofabusinesstransactionasitoccurs.Whenthebusinessperformsaservice,makesasaleorincursanexpense,theaccountantsrecordthetransactionevenifitreceivesorpaysnocash.Mostenterprisesusetheaccrualbasis.Chapter2AccountingEquationsandDebit-creditBookkeepingObjectives:1.Tounderstandtheclassificationofaccountingelementsandsetupofaccountingequations;2.TolearntoexpressaccounttitlesinEnglishaswellashowtodesignaccounts;3.Tomasterdouble-entrysystemandtrialbalance.Discussandanswerthefollowingquestions.1)WhatdoaccountingelementsincludeinChina?2)CanyouspeakoutsomeaccountingtitlesinEnglish?3)WhatistheDebit-creditbookkeeping?InstructionInordertoconductaccountingpracticeandexerciseaccountingsupervision,accountingpersonnelneedsomebasicaccountingskills.2.1AccountingElementsInChina,therearesixkindsofaccountingelementsineveryenterprise,includingassets,liabilities,owner’sequity,revenue,expensesandprofits.Therelationshipamongthemisalsoshowninanequation,i.e.Revenue－Expenses=Profits.Theserelationshipsareobjectiveandequal,sotheyarecalledaccountingequations.Theconceptofeachaccountingelementisintroducedbelow.AssetsAssetsaretheresourcesofvaluethatareownedandwillbringfutureeconomicprofitstoanentity.LiabilitiesUnlikethecaseofAssets,aliability’seconomicsacrificesmeanacompany’sfuturecashoutflow.Itisafuturesacrificeofeconomicbenefitsarisingfrompresentobligationsofanentityasaresultofthepasttransactionorevent.Owners’equityTheamountbywhichbusinessassetsexceedbusinessliabilitiesiscalledowners’equity(orshareholders’equity),namelyacompany’snetassets.Iftherearenoliabilities,theowners’equityisequaltothetotalamountoftheassets.RevenueRevenueistheeconomicresourcesflowingintoabusinessasaresultofrenderinggoodsorservicestocustomersduringagivenaccountingperiod.ExpensesExpensesalsocomefromthegeneralbusinessactivities.Increaseinexpenseswilldecreaseassetsandtheowner’sequity.Expensesaretheoutflowofabusiness’seconomicresourcesresultingfromearningrevenueorthecostoftheoperationalactivitiesforthebusiness.ProfitsProfitsarethefinalresultofprofitableoperationsofabusinessinanaccountingperiod.Netincome(ornetloss)istheresultofmatchingrevenuewithexpenses.Whenrevenueexceedsexpenses,netincomeoccurs.2.2AccountingEquationsAssets=Equities(Creditors’Equity＋Owners’Equity)=Liabilities＋Owners’EquityAssets－Liabilities=Owners’EquityRevenue－Expenses=ProfitAssets=Liabilities＋Owners’Equity＋(Revenue－Expenses)2.3AccountingTitlesandAccountsAccountingTitlesAccountingtitlesareusedtonametheaccountingelementsthatareclassifiedscientifically.Anaccountisthetoolthatcanrecordeconomictransactionthatanaccounttitlerepresents,soaccounttitleisseenasthenameofanaccount.InChina,therearesixgroupsofaccounttitlessuchasassets,liabilities,commonsubjects,owner’sequity,costs,andprofitsandlosses.Thechartofaccountsisuniformandappliedinaccounting.Thechartofaccounts,sometimescalledthecodeofaccounts,isalistingoftheaccountsbytitleandnumericaldesignation.AccountsAccountsareusedtomaintainanorderlyrecordofanyeconomictransactionoroperatingmatterssystematically,reflectingthechangeoftheaccountingelements(i.e.decreaseorincrease).Anaccountismadeupoftwobasicparts.Namely,iftheleftsiderepresentstheincreases,therightsiderecordsthedecreasesaccordingly,whichformsthebasicstructureofanaccount.2.4Debit-creditBookkeepingThemethodsusedtorecordeconomictransactionsaresingle-entrysystemanddouble-entrysystem.Thelatterisconsideredastheheartofmodernaccounting,andnowitiswidelyusedallovertheworld.Basedontheaccountingequation,double-entryaccountingmeanseachtransactionisrecordedinatleasttwoaccountswithequalamounts.2.5TrialBalanceDebit-creditbookkeepingrequiresthataccountingentryshouldbeconductedproperlyaccordingtothecorrespondingaccountsandnecessarytrialbalance.AndTrialBalanceisanaccountinglistingthatshowsthebeginningandendingbalancesforallaccountsincludedinthesetofbooks.Chapter3AccountingVouchersandAccountingBooksObjectives1.Tobefamiliarwiththeoperationsofsourcedocuments,recordingvouchersandothersdocuments;2.Tobeabletosetupaccountbookssuchasjournalsandledgers;3.Tolearntoperformaccountcheckingandclosing.Discussandanswerthefollowingquestions.1)Inaccountingpractice,howmanykindsofvouchersarebeingused?2)Whataremaindifferencesbetweengeneralledgersandsubsidiaryledgers?3)Whatstepsconsistofgeneralclosingproceduresofaccounting?IntroductionInaccountingpractice,itisthefirststepforaccountantstodrawupandexamineaccountingvouchers.Thevouchersincludeoriginalvouchers(orsourcedocuments)andrecordingvouchers(orentrydocument).3.1AccountingvouchersSourceDocumentsItisthestartofanaccountingcircletofillinorgetthesourcedocuments.Sourcedocumentsareoriginaldocumentsthatrecordtheoccurrenceandcompletionofeconomictransactions.Theyarefilledinorgotbythebusinessclerksassoonasthetransactionshappen.Becauseoftheirdifferentorigins,weoftenseetwokindsofsourcedocumentsinuse,namelytheexternalsourcedocumentsandtheinternalsourcedocuments.RecordingVouchersRecordingvouchersarealsocalledentrydocuments.Theyaredrawnupbyaccountingpersonnelbasedontheexaminedsourcedocumentsordocuments’summaries.Accordingtotheseentrydocuments,seenasimportantaccountingvouchers,accountingentriesandaccountbookscanbemadedirectly.ReceiptVouchersInthetopleft-handcornerofthereceiptvoucher,CashonhandorCashinbankshallbefilledinasthedebit’stitle.Thedateinthemiddleanditssequentialnumberintherightcornerarewrittendowntoo.Inthedescriptioncolumn,abriefreasonforrecordingthetransactionisincluded.DisbursementVouchersThedisbursementvoucherisdrawnupalmostinthesamewayasthereceiptvoucher,butinitstopleft-handcornerthecredit’stitleshallbefilledinwithCashonhandorCashinbank.TransferVouchersInthetransfervoucher,accountingtitleswiththegeneralandsubsidiaryshallbeindividuallyfilledinaccordingtothedebit’sandcredit’saccounts.Thefigureofthecreditandthesumofthedebitareenteredintheamountcolumn.3.2AccountingBooksJournalsThejournalisachronological(day-by-day)recordofallbusinesstransactions,andeachtransactionisregisteredintheorderofdate.Accordingtotheirdifferentcontents,journalsmaybegroupedintogeneraljournalsandspecialjournals.Thegeneraljournalcanbeusedtorecordalltypesoftransactions.Cashonhandjournalisappliedinacompanytoconductaccountingandsupervisiononthecashonhandconcerningdailyreceipt,disbursementandbalance.Therearesomemaincolumnsforthedate,document’stypeandorder,digest,oppositeaccount,debit,creditandbalance,etc..LedgersGeneralledger(ledger)issetupinaccordancewiththeaccountsofgeneralledgerandclassifiedtorecordeconomicactivitiesbybusiness,whichprovidesgeneralaccountinginformation;subsidiaryledger(subledger)issetupinaccordancewiththespecificaccountsandclassifiedtorecordtheeconomicactivitieswithmoredetailedinformation.Betweenthegeneralledgeranditssubsidiaryledger,thereisaspecialrelationshipthatthebalanceofthegeneralledgerisequaltothesumofbalancesinitssubsidiaryledgers.AccountCheckingandAccountClosing*AccountCheckingAccountcheckingreferstotheregularworkofcheckingtheentriesinaccountbooks.Thatis,everyunitshallregularlycheckthejournals’orledgers’recordswithphysicalassets,cashholdingsandrelevantinformationandensurethataccountingrecordsconformtotheactualamountofthephysicalassetsandcashholdings,accountingrecordsconformtotherelevantcontentsoftheaccountingvouchers,accountingrecordsconformtooneanother.[3]Alloftheabovetelluswhatanaccountantshalldowhilecheckingaccounts.*AccountClosingAftertheeconomicactivitiesthatoccurwithinacertainaccountingperiodareallaccountedinledgers,accountantsshallcalculateaccumulatedamountsincurrentperiodandendingbalance,whichwedefineitasaccountclosing.,andendingbalanceshallbepostedtothenextaccountingperiod.Chapter4AccountingCycleandBookkeepingProceduresObjectives:1.Tounderstandtheconceptoftheaccountingcycleandbasicsteps;2.Tolearntouserecordingvouchers,thecategorizedaccountsummaryandsummaryvouchersandotheraccountingprocedures.Discussandanswerthefollowingquestions.1)Inaccountingpractice,whatbasicstepsconsistofaccountingcycle?2)Whatisbookkeepingprocedures?3)Whydoaccountantsneedtoprepareaworksheetbeforemakingfinancialstatements?IntroductionDuringacertainperiod,anaccountingcycleinanentityisasequenceofaccountingprocedures,whichstartswithaccountingdocumentswrittenwhenaneconomictransactionoccurs,andendsinaccountingstatementspreparedafteraccountbooksareentered.Thewholeaccountingcycleoftenlastsonemonthandincludesfourphases:accountingconfirmation,accountingcalculation,accountingrecordandaccountingreport.4.1AccountingCycleThesequenceofaccountingproceduresusedtorecord,classify,andsummarizeaccountinginformationisoftentermedtheaccountingcycle.Theaccountingcyclebeginswiththeinitialrecordingofbusinesstransactionsandconcludeswiththepreparationofformalfinancialstatementssummarizingtheeffectsofthesetransactionsupontheassets,liabilities,andowners'equityofthebusiness.Step1AnalyzetransactionsandbusinessdocumentsStep2JournalizetransactionsStep3PostjournalentriestoaccountsStep4DetermineaccountbalancesandprepareatrialbalanceStep5PrepareaworksheetStep6PreparefinancialstatementsStep7Journalizeandpostadjustingentries.Step8MakeclosingentriesStep9Prepareapost-closingTrialBalance4.2BookkeepingProceduresBookkeepingProcedureUsingRecordingVouchersThebookkeepingprocedureusingrecordingvouchersmeansgeneralledgerscanbedirectlymadeaccordingtoeveryrecordingvoucher,whichistypicalofthisprocedure.BookkeepingprocedureusingrecordingvouchersStep1Preparesummarizedsourcevouchersandmakerecordingvouchers(includingreceiptvouchers,paymentvouchersandtransfervouchers)accordingtothesourcevouchersorsummarizedsourcevouchersthatareexaminedcorrectly;Step2Posteachentryintocashonhandjournalsandcashinbankjournalsaccordingtoeveryreceiptvoucherandpaymentvoucher;Step3Designsubsidiaryledgersinaccordancewithsourcevouchers,summarizedsourcevouchersandrecordingvouchers;Step4Preparegeneralledgersaccordingtoeveryentryinrecordingvouchers;Step5Checkeachbalanceinspecialjournalsandtheamountofsubsidiaryledgers’balanceagainsteachrelatedbalanceingeneralledgersattheendofamonth;Step6Prepareaccountingstatementsattheendofamonthafterentriesingeneralledgersandsubsidiaryledgersareexaminedcorrectly.BookkeepingProceduresUsingCategorizedAccountSummaryAcategorizedaccountsummaryisaform.Inthisform,someaccounttitlesarelistedinadvancetomeettheneedforaunit’saccounting.Attheendofamonth(orperiodically),eachtitle’sdebitamountisaddedaccordingtotheentriesinreceiptvouchers,paymentvouchersandtransfervouchers,andthesumofeachtitleisenteredintodebitsideintheform.BookkeepingproceduresusingcategorizedaccountsummaryStep1Preparesummarizedsourcevouchersonthebasisofanalyzingsourcevouchers;Step2Makerecordingvouchersaccordingtothesourcevouchersorsummarizedsourcevouchersthatareexaminedcorrectly;Step3Posteachentryintocashonhandjournalsandcashinbankjournalsaccordingtoeveryreceiptvoucherandpaymentvoucher;Step4Designspecificledgersinaccordancewithsourcevouchers,summarizedsourcevouchersandrecordingvouchers;Step5Preparethecategorizedaccountsummaryaccordingtoeveryentryinrecordingvouchers;Step6Enteranytransactionintogeneralledgersusingthecategorizedaccountsummary.Step7Checkeachbalanceincashonhandjournals,cashinbankjournalsandsubsidiaryledgersagainsteachrelatedbalanceingeneralledgersattheendofaperiod;Step8Prepareaccountingstatementsattheendofaperiodinaccordancewithgeneralledgersandsubsidiaryledgers.BookkeepingProcedureUsingSummaryVouchersThebookkeepingprocedureusingsummaryvouchersmeansgeneralledgerscanbedirectlymadeaccordingtoeverysummaryvoucher.Insummaryvouchers,therearesummarizedreceiptvouchers,summarizedpaymentvouchersandsummarizedtransfervouchers.BookkeepingprocedureusingsummaryvouchersStep1Preparerecordingvouchersafterexaminingsourcevouchersorsummarizedsourcevouchers;Step2PostentriesintoCashonhandjournalsandCashinbankjournalsaccordingtoreceiptvouchersandpaymentvouchers;Step3Enterintherelatedspecificledgersonthebasisofsourcevouchers,summarizedsourcevoucherandrecordingvouchers;Step4Designsummarizedtransfervouchersseparatelyinaccordancewithalloftherecordingvouchersduringacertainperiod;Step5Preparegeneralledgersaccordingtosummarized-periodicallyspecialjournalsandsummarizedtransfervouchers;Step6Checkeachbalanceinspecialjournalsandtheamountofspecificledgers’balanceagainsteachrelatedbalanceingeneralledgersattheendofamonth;Step7Prepareaccountingstatementsattheendofamonthafterentriesingeneralledgersandspecificledgersareexaminedcorrectly.Chapter5AccountingPracticeandIllustrationObjectives:1.Tolearntomakebasicentriesofaccountingpractice;2.Tocommandthecalculationoffinancialresults.Discussandanswerthefollowingquestions.1)Inabusiness,whatkindsofthreeprocessesareincludedintheoperating?2)Whatismanufacturingcost,andhowtocalculateit?3)Whatdoesfinancialresultsmean,andhowtounderstanditstype?IntroductionInabusiness,theoperatingprocesscanbemadeupofthesupplyprocess,theproductionprocessandthesalesprocess,butfundingisaprerequisiteofitsproductionandoperatingactivities.5.1AccountingforFinancingAbusinessisalwaysfundedbyitsowner’sinvestmentandborrowedmoneyfrombanksorothercreditors.Theformerisnamedequityfinancingorpaid-incapital,andthelattercalleddebtfinancingbecomesitsdebt.EquityFinancingTheowner’sequityrepresentshis(orher)claimsontheassetsofabusiness.Oneoftheprimarysourcestoincreasetheowner’sequityishis(orher)owninvestment.Theinvestmentwillbecashorotherassets.DebtFinancingLiabilityordebtrepresentsthecreditor’sclaimsontheassetsofabusiness.Besidesequityfinancing,it’sanothermajorsourceforabusinesstoprovidemoney.Abankloanisthetypicalkindofanindustry’sliability.5.2AccountingforSupplyingForanymanufacturingindustry,supplyingisthebeginningofitsoperatingactivities.Duringthesupplyingprocess,it’snecessaryfortheownerstospendcertainmoneyinbuildingthefactoryandpurchasingthemachineryandmaterials.Inthisway,theassetsneededformanufacturingshouldbeprepared.Someofthemcouldbeinvestedbytheowners,whilemore(e.g.materialsespecially)willbepurchasedduringtheoperation.AccountingforRawMaterialsPurchasingRawmaterialsarethebasicmaterialsandpartspurchasedforproducingsaleableproducts.Oncethecompanypurchasesrawmaterials,rawmaterialsareincreasedwithcashdecreasedoraccountspayableincreasedbythesameamount.AccountingforFixedAssetsPurchasingFixedassetsoftenrefertopropertyormachinerywhichacompanyownsanduses,butwhichthecompanydoesnotbuyorsellaspartofitsregulartrade.Theyconsistmainlyofland,buildings,equipment,machines,vehicles,etc.5.3AccountingforManufacturingAccountingProceduresforManufacturingCostRecordedduringanindustry’sproducingactivities,alltheproductsfullymanufacturedandreadyforsaleisclassifiedasfinishedgoods.Thoseproducts,partiallyfinishedandrequiredfurtherprocessing,arenamedworkinprocessandcannotbesold.Expensesincurredinmanufacturingproductsconstituteitsproductioncosts.Inamanufacturingindustry,it’smorecomplicatedtoconductaccountingonthecostflowfromrawmaterialstofinishedproductsthanthatinanon-manufacturingindustry.Andtheaccountingshallinvolvesuchexpensesassociatedwithconsumptionofrawmaterials,depreciationoffixedassets,andlaborofproducers.5.4AccountingforSellingInanenterprise,sellingitsproductmeansthattheproduct’svaluesandtheoperatingresultscanberealized.Duringthesellingcourse,salesrevenueflowsin,andbothcostofsalesandsellingoverheadgeneratewiththerelatedtaxpayments.Asaresult,it’simportantfortheenterprisetorecordproperlyitssalesrevenueandcostofgoodssold,whichisnecessaryforitsmanagersandusersofthefinancialstatements.Inordertoconductaccountingpracticeandexerciseaccountingsupervisiononthesellingmatters,accountsonProfit&LossandAssetsshallbecreatedforanenterprise.InProfit&Loss,accountsareprimeoperatingrevenue,otheroperatingrevenue,operatingcosts,otheroperatingcost,taxandassociatecharges,sellingexpenses,etc.InAssets,theaccountcanbeaccountsreceivable.AccountingforSalesRevenueRevenueisthegrossinflowofeconomicbenefitsderivedfromtheordinaryactivitiesofsellingproductthatresultinincreasesintheowner’sequity.However,revenueisrecognizedonlywhenitisprobablethateconomicbenefitswillflowtotheenterprise,whichwillresultinanincreaseinassetsordecreaseinliabilitiesandtheamountoftheinflowofeconomicbenefitscanbemeasuredreliably.AccountingforCostofGoodsSoldCostofgoodssold(COGS)isamajorexpenseitemformostnonservicebusinessesandisdirectlyrelatedtosalesrevenue.Itincludesthecostofallproducts(ormerchandiseincommercialcompanies)soldduringthesameaccountingperiodinwhichrelativesalesaremade.Thecostofproductsormerchandiseremainingonhandattheendoftheaccountingperiod(i.e.,theendingfinishedgoodsormerchandiseinventory)isexcludedfromcostofgoodssold.Themeasurementofcostofgoodssoldisanexcellentexampleoftheapplicationofthematchingprinciple.5.5AccountingforFinancialResultsFinancialresultsrefertotheprofitsthatacompanymakesinacertainaccountingperiod,andarealwaysclassifiedintothreetypes,namelyoperatingprofit,totalprofitandnetprofit,andinthisbooktotalprofitisseenasthetaxableitem.Therelationshipsamongthemcanbeshownasfollows:Totalprofit=Operatingprofit＋Non-operatingincome－Non-businessexpenditureNetprofit=Totalprofit－IncometaxexpensesIncometaxexpenses=Totalprofit×TaxratioChapter6FinancialStatementsObjectives:1.Tocommandthecomponentsandtheirrelationshipoffinancialstatements;2.Tolearntopreparebasicfinancialstatements.Discussandanswerthefollowingquestions.1)Inanenterprise,whatkindsoffinancialstatementsareneeded?2)Canyousimpledescribethefunctionsofthreemajorfinancialstatements?3)Whatarelinksamongoperatingprofit,totalprofitandnetprofit?IntroductionInAccountingLawofthePeople’sRepublicofChina,theunitsthatuseacurrencyotherthanRenminbiaschiefcurrencyintheirbusinessreceiptsandexpendituresmayselectonespecificcurrencyastheirbasicaccountingcurrency,buttheaccountstobereportedintheirfinancialstatementsshallstillbeconvertedtoandexpressedinRenminbi.Anenterprisepublishesthesestatementsregularlysothatitcanconveytheprofitabilityandfinancialpositiontoitsmanagementandtheinterestedoutsiders.So,togetherwithaccountingvouchers,accountbooksandotheraccountingdocuments,accountingstatementsmustconformtotheprovisionsoftheuniformaccountingsystemofthestate.6.1BalanceSheetItemsinBalanceSheetAbalancesheetisafinancialstatementthatreflectsthefinancialpositionofanenterpriseataspecificdate(e.g.theendofamonth,aquarter,halfayearorayear,etc.Sometimesitisalsocalledthestatementoffinancialposition.ThemethodofpreparingabalancesheetisinaccordancewithAccountingEquation:Assets=Liabilities+Owners’Equity,andthesheetcanshowtherelationshipamongassets,liabilitiesandowners’equityofabusinessonaparticularday.SampleofBalanceSheetAbalancesheetappearsintwoforms:accountform(alsocalledhorizontalformat)andreportform(alsocalledverticalformat).InChina,theaccountformisacceptable,whichisstipulatedinAccountingStandardforBusinessEnterprises.Fortheaccountform,theassetsareontheleftcolumn,andontherightcolumnareliabilitiesandowner’sequity.Initsheading,thebalancesheetliststhreeitems:thenameoftheenterprise,thenameofthefinancialstatement(i.e.BalanceSheet)andthedateofitspreparation.6.2IncomeStatementItemsinIncomeStatementAnincomestatementisanfinancialstatementthatreflectstheoperatingresultsofanenterpriseforacertainaccountingperiod.SometimesitisalsocalledProfit&LossStatement.Itspurposeistomeasurewhetherornotabusinessachievestheacceptableincomeinacertainperiod,andtopresentthemostimportantinformation,thatisnetprofitofthebusiness,somanypeopleconsideritasthemostimpor