西方财务会计培训资料(英文版)课件

西方财务会计WESTERNFINANCIALACCOUNTING西方财务会计WESTERNFINANCIALA1Chapter1

TheFinancialAccountingConceptualFrameworkAndTheAccountingEquationChapter1

TheFinancialAccou21.1ACCOUNTINGAserviceactivity----ProvideusefulinformationabouteconomicentitiestointerestedpartiesAndameasurement-communicationactivity----Theusefulnessofaccountinginformationdependsoneffectivemeasurementoftheeconomicactivitiesandeffectivecommunicationofthosemeasurementstousersofthatinformation.1.1ACCOUNTINGAserviceactivi3AccountinginformationanddecisionmakersAccountinginformationFinancialaccounting

ManagementAccountingExternalDecisionmakersInternalDecisionmakersAccountinginformationanddec41.2COMPARISONBETWEENFINANCIALANDMANAGEMENTACCOUNTINGManagementAccounting----Theprocessofdevelopingandreportingaccountinginformationforinternaluserswhohavedirectaccesstotheinformationpreparing.1.2COMPARISONBETWEENFINANC51.2COMPARISONBETWEENFINANCIALANDMANAGEMENTACCOUNTINGFinancialAccounting----TheprocessofdevelopingandreportingfinancialinformationforexternaluserswhodonothavedirectaccesstotheinformationpreparingwhichshouldbeinaccordancewithGeneralAcceptedAccountingPrinciples(GAAP).

1.2COMPARISONBETWEENFINANC6GAAPGenerallyacceptedaccountingprinciplesarethemeasurementrulesusedtodeveloptheinformationinfinancialstatement.Theyarethoseguidelineswhichindicatehowtoreporteconomicevents.Theyconsistofanumberofconcepts,principlesandprocedures.GAAPGenerallyacceptedaccount7GenerallyAcceptedAccountingPrinciplesTheSecuritiesandExchangeCommission(SEC)hastheauthoritytodeterminethefinancialstatementstobeprovidedtostockholdersandthemeasurementrulesappliedinproducingthestatements.TheFinancialAccountingStandardsBoard(FASB)iscurrentlyrecognizedasthegroupresponsibleforestablishingGAAP.GenerallyAcceptedAccounting8TheConceptualFrameworkTheFinancialAccountingStandardsBoard(FASB)issuesStatementsofFinancialAccountingConcepts.Thesestatementsconstitutetheconceptualframeworkofaccounting.TheConceptualFrameworkTheFi91.3THEFASB’SFINANCIALACCOUNTINGCONCEPTUALFRAMEWORK1.3-1ObjectivesoftheConceptualFrameworkTheFrameworkistobethefoundationforbuildingasetofcoherentaccountingstandardsandrules.TheFrameworkistobeareferenceofbasicaccountingtheoryforsolvingemergingpracticalproblemsofreporting.1.3THEFASB’SFINANCIALACCO101.3-2OverviewoftheConceptualFramework----ThreelevelsofobjectiveselementsandprinciplesThefirstlevelconsistsofobjectives.Thesecondlevelexplainsfinancialelementsandcharacteristicsofinformation.Thethirdlevelincorporatesrecognitionandmeasurementcriteria.1.3-2OverviewoftheConceptu11LevelI.BasicObjectivesofFinancial

ReportingToprovideinformation:abouteconomicresources,theclaimsonthoseresourcesandchangesinthemthatisusefultothosemakinginvestmentandcreditdecisions,suchaspresentandfutureinvestors,creditorsinassessingfuturecashflows;Andtoindividualswhoreasonablyunderstandbusinessandeconomicactivities.LevelI.BasicObjectivesofF12LevelII.BasicElementsAndQualitativeCharacteristicsofAccountinginformationLiabilities:ProbablefuturesacrificesofeconomicbenefitsEquity:ResidualorownershipinterestInvestmentbyOwners:IncreasesinnetassetsDistributionstoOwners:DecreasesinnetassetsComprehensiveIncome:Changesinequityfromnon-ownersourcesRevenues:Inflowsfromentity’songoingoperationsExpenses:Outflowsfromentity’songoingoperationsGains:IncreasesinequityfromincidentaltransactionsLosses:DecreasesinequityfromincidentaltransactionsAssets:Probablefutureeconomicbenefits(i)ElementsinFinancialStatementsLevelII.BasicElementsAndQ13ElementsinfinancialstatementsRevenuesExpenses

incomestatementGainsLossesComprehensiveincomeAssetsLiabilitiesbalancesheetOwner’sequityInvestmentbytheownersDistributionstoownersElementsinfinancialstatemen14REVENUESRevenues

arethegrossincreasesinowners’(stockholders’)equitythatresultfromoperatingthebusiness.Generally,revenuesresultfromthesaleofmerchandise,theperformanceofservices,therentalofproperty,orthelendingofmoney.Revenuesusuallyresultinanincreaseinanasset.REVENUESRevenuesarethegross15EXPENSESExpenses

arethedecreasesinowners’(stockholders’)equitythatresultfromoperatingthebusiness.Theyarethecostofassetsconsumedorservicesusedintheprocessofearningrevenue.Examplesofexpensesincludeutilityexpense,rentexpense,suppliesexpense,andtaxexpense.Whenrevenuesexceedexpenses,netincomeresults.Whenexpensesexceedrevenues,anetlossresults.EXPENSESExpensesarethedecre16Gainsandlosses(con.)Gains:increaseinequityfromincidentalorperipheraltransactionsnotassociatedwiththecompany’smajororcentrallinesofbusiness,e.g.gainfromdisposaloffixedasset.Gainsandlosses(con.)Gains:i17GainsandlossesLosses:decreaseinequityfromincidentalorperipheraltransactionsnotassociatedwiththecompany’smajororcentrallinesofbusiness,e.g.lossfromdisposaloffixedasset.GainsandlossesLosses:decrea18ASSETSAssetsareresourcesownedbyabusiness.Theyarethingsofvalueusedincarryingoutsuchactivitiesasproduction,consumptionandexchange.Thecommoncharacteristicspossessedbyallassetsisthecapacitytoprovidefutureservicesorbenefitstotheentitiesthatusethem.ASSETSAssetsareresourcesown19LIABILITIESLiabilities

areclaimsagainstassets.Theyareexistingdebtsandobligations.Mostclaimsofcreditorsattachtototalenterpriseassetsratherthantothespecificassetsprovidedbythecreditor.LIABILITIESLiabilitiesarecla20Owner’sequityClaimonnetassetsOwner’sequity=totalassets-totalliabilitiesDifferentOE

Proprietorship

andpartnership:Capital(subdivisions:Capital;Drawing)

Corporation:Stockholders’equity

(subdivisions:Paid-incapital;Retainedearnings)Owner’sequityClaimonnetass21InvestmentsbyOwnersRevenuesOwners’EquityDrawingExpensesINCREASESANDDECREASESIN

OWNERS’EQUITYINCREASEDECREASEInvestmentsbyOwnersRevenuesO22InvestmentsbyStockholdersRevenuesStockholders’EquityDividendstoStockholdersExpensesINCREASESANDDECREASESIN

STOCKHOLDERS’EQUITYINCREASEDECREASEInvestmentsbyStockholdersRev23(ii).QualitativeCharacteristicsofAccountingInformation1.PrimaryqualitiesareRelevanceandReliabilityofaccountinginformation.Relevanceofinformationmeans“informationcapableofmakingadifferenceinadecisioncontext.”Theinformationmustbetimely

toberelevant.Theinformationshouldhavepredictivevalue:(behelpfulinmakingpredictionsaboutultimateoutcomesofpast,presentandfutureevents).Theinformationshouldhavefeedbackvalue(helpsuserstoconfirmpriorexpectations.)(ii).QualitativeCharacterist24Informationisreliable,whenitcanbereliedontorepresentthetrue,underlyingsituation.Tobereliable,informationmustbe: *verifiable

*faithful,and

*neutral

Informationisreliable,when252.Secondarycharacteristicsare:comparabilityandconsistencyofreportedinformation.Forinformationtobe

comparable,itmustbe:1)measuredandreportedinasimilarmannerfordifferententerprises.2)usefulintheallocationofresourcestotheareasofgreatestbenefit.3)usefultousersinidentifyingrealdifferencesbetweenenterprises.2.Secondarycharacteristicsa26Accountinginformationisconsistent,

if

thesameaccountingprinciplesareappliedinasimilarmannerfromoneperiodtothenext.Accountingprinciplesmaybechanged,ifthechangeresultsinbetterreporting.Ifprinciplesarechanged,thejustificationfor,andthenatureandeffectofthechange,mustbe disclosed.Accountinginformationiscons27LevelIII.RecognitionandMeasurementCriteria(I).EnvironmentalAssumptions

1.EconomicEntityAssumptionAneconomicentitycanbeanyorganizationorunitinsociety.Thebusinessisdistinctfrom:(1)itsownersand(2)allothereconomicentities.Abusinessenterprisemaybeorganizedassoloproprietorship,partnershipandcorporation.LevelIII.RecognitionandMea28Solo-proprietorshipAbusinessownedbyoneperson.Theownerisoftenthemanager/operatorofthebusiness.Smallservice-typebusinessesorsmallretailstores.Solo-proprietorshipAbusiness29Solo-proprietorshipUsuallyonlyalimitedamountofmoney(capital)isnecessarytostartinbusiness,andtheownerreceivesanyprofits,suffersanylosses,andispersonallyliableforalldebtsofthebusiness.Solo-proprietorshipUsuallyonl30PartnershipWhenabusinessisownedbytwoormorepersons(partners).Whenapartnershipiscreated,thereshouldbeanagreementsettingforthsuchtermsasinitialinvestmentofeachpartner,dutiesofeachpartner,divisionofprofitsorlosses,andsettlementtobemadeupondeathorwithdrawalofapartner.PartnershipWhenabusinessis31PartnershipEachpartnergenerallyhasunlimitedpersonalliabilityforthedebtsofthepartnership.Thepartnershipaffairsmustbekeptseparatefromthepersonalactivitiesofthepartners.PartnershipEachpartnergenera32CorporationAbusinessorganizedasaseparatelegalentityunderstatecorporationlawanditsownershipdividedintotransferablesharesofstockiscalledacorporation.Theholdersofthesharesenjoylimitedliability;theyarenotpersonallyliableforthedebtsofthecorporateentity.CorporationAbusinessorganize332.GoingConcernAssumptionThebusinessisassumedtocontinueindefinitelyunlessterminatedbyowners.Thebasisofrecordingfinancialelementsishistoricalaccounting.Liquidationaccounting(basedonliquidationvalues)isnotfollowedunlesssoindicated.2.GoingConcernAssumption343.MonetaryUnit(UnitOfMeasurement)Moneyisthecommonunitofmeasureofeconomictransactions.Useofamonetaryunitisrelevant,andsimpletounderstand.3.MonetaryUnit(UnitOfMeasu354.TimePeriodAssumption(tobeexplainedinChapter2)4.TimePeriodAssumption362222(iii).ImplementationPrinciples1.CostPrinciple(HistoricalCostPrinciple)Transactionisrecordedatitsacquisitionprice.Itisnotchangedtoreflectmarketprice.Theprincipleappliestoassetsandliabilities.Usersoffinancialstatementsmayfindcurrentfairvalueinformationtobeusefulaswell.A“mixedattribute”systemreportshistoricalcost,fairvalue,andlowerofcostormarketvaluesappliedtoinventoryvaluation(tobeexplainedinChapter7).2222(iii).ImplementationPrin372.RevenueRecognitionPrincipleRevenueisrecognizedwhenitisearnedorrealizable,theseller’smajortaskhascompletedandtheamountcanbeobjectivelydetermined.2.RevenueRecognitionPrincip3824243.TheMatchingPrincipleExpensesinoneperiodarematchedtorevenuesofthesameperiodsoastodeterminetheprofitinthecureentperiodappropriately.24243.TheMatchingPrinciple394.TheFullDisclosurePrincipleFinancialstatementsmustreportwhatareasonablepersonwouldneedtoknowtomakeaninformeddecision.Disclosuremaybemade:withinthebodyofthefinancialstatements,asnotestothosestatements,orassupplementaryinformation.4.TheFullDisclosurePrincip40

ImplementationConstraints

1.Cost-BenefitRelationship

*Thecostofprovidinginformationshouldnotoutweighthebenefitderived.*Costsandbenefitsarenotalwaysobviousorquantifiable.*Soundjudgmentmustbeusedinprovidinginformation.2.Materialityreferstoanitem’simportancetoafirm’soverallfinancialoperations.ImplementationConstraints413.IndustryPracticesThenatureofsomeindustriesmaysometimesrequiredeparturesfrombasicaccountingtheory.Ifapplicationofaccountingtheoryresultsinstatementsthatarenotcomparableorconsistent,thenindustrypracticesmustexaminedforpossibleexplanations.3.IndustryPractices424.Conservatism

suggeststhatthepreparer,whenindoubt,chooseaconservativesolution.Thissolutionwillbeleastlikelytooverstateassetsandincome.Conservatismdoesnotsuggestthatnetassetsornetincomebedeliberatelyunderstated.4.Conservatismsuggeststhat431.4TheAccountingEquationAndTransactionsTheAccountingEquation:

Assets=Liabilities+Owners’Equity1.4TheAccountingEquationAn44Transactions

aretheeconomiceventsoftheenterprise.Theymaybeidentifiedasexternalorinternal.

1Externaltransactions

involveeconomicevents betweenthecompanyandsomeoutside enterpriseorparty.

2Internaltransactions

areeconomiceventsthat occurentirelywithinonecompany.TRANSACTIONANALYSISTransactionsaretheeconomic45RexNelson

decidedtoopenacomputerprogrammingcompanywhichnamedasSoftroom.Heinvested$150,000cashinthebusiness. TRANSACTIONANALYSISTRANSACTION1RexNelsondecidedtoopenac46ThereisanincreaseintheassetCash,$15,000,andanequalincreaseinthestockholders’equity,R.N.Capital,$150,000.TRANSACTIONANALYSISTRANSACTION1SOLUTION(1)

+150,000=+150,000CapitalAssets=Liabilities+Owners’EquityR.NelsonCashCapitalThereisanincreaseintheas47TRANSACTIONANALYSISTRANSACTION

2Softroom

purchasedcomputerequipmentfor$70,000cash.TRANSACTIONANALYSISTRANSACTI48Cashisdecreased$70,000andtheassetEquipmentisincreased$70,000.TRANSACTIONANALYSISTRANSACTION2SOLUTION=+70,000=(2)

-70,000+70,000

Assets=Liabilities+R.N.CapitalCash+EquipmentOldBal.150,000150,000NewBal.80,000150,000Owners’EquityCashisdecreased$70,000and49Softroom

purchasedcomputerpaperandothersuppliesexpectedtolastseveralmonthsfromAdamSupplyCompanyfor$16,000oncredit.TRANSACTIONANALYSISTRANSACTION

3AdamSupplyCompanySoftroom,Inc.Softroompurchasedcomputerpa50TheassetSuppliesisincreased$16,000andtheliabilityAccountsPayableisincreasedbythesameamount.TRANSACTIONANALYSISTRANSACTION3SOLUTION+=+(3)

+16,000+16,000

Assets=Liabilities+Owners’EquityAccountsR.N.CapitalCash+Supplies+Equipment=Payable+OldBal.80,00070,000150,000NewBal.80,00016,000+70,00016,000150,000TheassetSuppliesisincrease51Softroom

received$12,000cashfromcustomersforprogrammingservicesithasprovided.TRANSACTIONANALYSISTRANSACTION

4SoftroomSoftroomreceived$12,000cash52Cashisincreased$12,000andR.N.Capitalisincreased$12,000.Assets=Liabilities+Stockholders’EquityAccountsCash+Supplies+Equipment=Payable+OldBal.80,00016,00070,00016,000150,000NewBal.92,000+16,000+70,000=16,000+162,000R.N.CapitalTRANSACTIONANALYSISTRANSACTION4SOLUTION(4)+12,000+12,000ServiceRevenue

Cashisincreased$12,000and53Softroom

receivedabillfor$2,500fromtheDailyNewsforadvertisingtheopeningofitsbusinessbutpostponedpaymentofthebilluntilalaterdate.SoftroomDailyNewsBillTRANSACTIONANALYSISTRANSACTION

5Softroomreceivedabillfor$54AccountsPayableisincreased$2,500,andR.N.Capitalisdecreased$2,500.TRANSACTIONANALYSISTRANSACTION5SOLUTIONAssets=Liabilities+AccountsCash+Supplies+Equipment=Payable+OldBal.92,00016,0070,00016,000162,000NewBal.92,000+16,000+70,000=18,500+159,500Stockholders’EquityR.N.Capital+2,500-2,500AdvertisingExpenseAccountsPayableisincreased55Softroom

providedprogrammingservicesof$35,000forcustomers.Cashamountingto$15,000wasreceivedfromcustomers,andthebalanceof$20,000wasbilledtocustomersonaccount.SoftroomBillTRANSACTIONANALYSISTRANSACTION

6Softroomprovidedprogramming56TRANSACTIONANALYSISTRANSACTION6SOLUTION

Assets=Liabilities+Owners’EquityCash+A/R+Supplies+Equipment=AccountsPayable+R.NCapital

Oldbal.

92,00016,00070,00018,500159,500+15000+20000

+35,000ServiceRevenueCashwasincreased$15000;AccountsReceivablewasincreased$20000;;andCapitalwasincreased$35000TRANSACTIONANALYSISTRANSACTI57ExpensespaidincashforSeptemberwerestorerent,$6,000,salariesofemployees,$9,000,andutilities,$2,000.Softroom,Inc.$6,000$9,000$2,000TRANSACTIONANALYSISTRANSACTION

7RentExp.SalariesExp.UtilitiesExp.ExpensespaidincashforSept58AcountofsuppliesonSeptember30indicatedthat$4,000ofsupplieshadbeenusedindevelopingsoftwareforclients.TRANSACTIONANALYSISTRANSACTION

8

Assets=Liabilities+Owners’EquityCash+A/R+Supplies+Equipment=AccountsPayable+R.NCapital

-4,000

-4,000SuppliesExpenseAcountofsuppliesonSeptemb59Softroom

paiditsDailyNewsadvertisingbillof$2,500incash.Ithadpreviouslybeenrecordedintransaction5asanincreaseinAccountsPayable.Softroom,Inc.DailyNewsTRANSACTIONANALYSISTRANSACTION

9

Assets=Liabilities+Owners’Equity

Cash+A/R+Supplies+Equipment=AccountsPayable+R.NCapital-2500

-2500SoftroompaiditsDailyNewsa60Thesumof$6,000incashwasreceivedfromcustomerswhohadpreviouslybeenbilledforservicesinTransaction6.TRANSACTIONANALYSISTRANSACTION

10Softroom,Inc.

Assets=Liabilities+Owners’EquityCash+A/R+Supplies+Equipment=AccountsPayable+R.NCapital

+6,000-6,000Thesumof$6,000incashwas61R.Nelsonwithdrew$13,000incashfromthebusinessforhispersonaluse.Softroom$13,000TRANSACTIONANALYSISTRANSACTION

11Cash+A/R+Supplies+Equipment=AccountsPayable+R.NCapital

Assets=Liabilities+Owners’Equity-13,000-13,000DrawingR.Nelsonwithdrew$13,000in62Summaryoftransactions1.Eachtransactionmustbeanalyzedintermsofitseffecton:1)thethreeelementsofthebasicaccountingequation.2)specifictypesofitemswithineachelement.2.Thetwosidesoftheequationmustalwaysbeequal.3.Thecausesofeachchangeintheowner’sclaimonassetsmustbeindicadedintheowner’sequitycolumn.Summaryoftransactions1.Each63西方财务会计培训资料(英文版)课件64西方财务会计WESTERNFINANCIALACCOUNTING西方财务会计WESTERNFINANCIALA65Chapter1

TheFinancialAccountingConceptualFrameworkAndTheAccountingEquationChapter1

TheFinancialAccou661.1ACCOUNTINGAserviceactivity----ProvideusefulinformationabouteconomicentitiestointerestedpartiesAndameasurement-communicationactivity----Theusefulnessofaccountinginformationdependsoneffectivemeasurementoftheeconomicactivitiesandeffectivecommunicationofthosemeasurementstousersofthatinformation.1.1ACCOUNTINGAserviceactivi67AccountinginformationanddecisionmakersAccountinginformationFinancialaccounting

ManagementAccountingExternalDecisionmakersInternalDecisionmakersAccountinginformationanddec681.2COMPARISONBETWEENFINANCIALANDMANAGEMENTACCOUNTINGManagementAccounting----Theprocessofdevelopingandreportingaccountinginformationforinternaluserswhohavedirectaccesstotheinformationpreparing.1.2COMPARISONBETWEENFINANC691.2COMPARISONBETWEENFINANCIALANDMANAGEMENTACCOUNTINGFinancialAccounting----TheprocessofdevelopingandreportingfinancialinformationforexternaluserswhodonothavedirectaccesstotheinformationpreparingwhichshouldbeinaccordancewithGeneralAcceptedAccountingPrinciples(GAAP).

1.2COMPARISONBETWEENFINANC70GAAPGenerallyacceptedaccountingprinciplesarethemeasurementrulesusedtodeveloptheinformationinfinancialstatement.Theyarethoseguidelineswhichindicatehowtoreporteconomicevents.Theyconsistofanumberofconcepts,principlesandprocedures.GAAPGenerallyacceptedaccount71GenerallyAcceptedAccountingPrinciplesTheSecuritiesandExchangeCommission(SEC)hastheauthoritytodeterminethefinancialstatementstobeprovidedtostockholdersandthemeasurementrulesappliedinproducingthestatements.TheFinancialAccountingStandardsBoard(FASB)iscurrentlyrecognizedasthegroupresponsibleforestablishingGAAP.GenerallyAcceptedAccounting72TheConceptualFrameworkTheFinancialAccountingStandardsBoard(FASB)issuesStatementsofFinancialAccountingConcepts.Thesestatementsconstitutetheconceptualframeworkofaccounting.TheConceptualFrameworkTheFi731.3THEFASB’SFINANCIALACCOUNTINGCONCEPTUALFRAMEWORK1.3-1ObjectivesoftheConceptualFrameworkTheFrameworkistobethefoundationforbuildingasetofcoherentaccountingstandardsandrules.TheFrameworkistobeareferenceofbasicaccountingtheoryforsolvingemergingpracticalproblemsofreporting.1.3THEFASB’SFINANCIALACCO741.3-2OverviewoftheConceptualFramework----ThreelevelsofobjectiveselementsandprinciplesThefirstlevelconsistsofobjectives.Thesecondlevelexplainsfinancialelementsandcharacteristicsofinformation.Thethirdlevelincorporatesrecognitionandmeasurementcriteria.1.3-2OverviewoftheConceptu75LevelI.BasicObjectivesofFinancial

ReportingToprovideinformation:abouteconomicresources,theclaimsonthoseresourcesandchangesinthemthatisusefultothosemakinginvestmentandcreditdecisions,suchaspresentandfutureinvestors,creditorsinassessingfuturecashflows;Andtoindividualswhoreasonablyunderstandbusinessandeconomicactivities.LevelI.BasicObjectivesofF76LevelII.BasicElementsAndQualitativeCharacteristicsofAccountinginformationLiabilities:ProbablefuturesacrificesofeconomicbenefitsEquity:ResidualorownershipinterestInvestmentbyOwners:IncreasesinnetassetsDistributionstoOwners:DecreasesinnetassetsComprehensiveIncome:Changesinequityfromnon-ownersourcesRevenues:Inflowsfromentity’songoingoperationsExpenses:Outflowsfromentity’songoingoperationsGains:IncreasesinequityfromincidentaltransactionsLosses:DecreasesinequityfromincidentaltransactionsAssets:Probablefutureeconomicbenefits(i)ElementsinFinancialStatementsLevelII.BasicElementsAndQ77ElementsinfinancialstatementsRevenuesExpenses

incomestatementGainsLossesComprehensiveincomeAssetsLiabilitiesbalancesheetOwner’sequityInvestmentbytheownersDistributionstoownersElementsinfinancialstatemen78REVENUESRevenues

arethegrossincreasesinowners’(stockholders’)equitythatresultfromoperatingthebusiness.Generally,revenuesresultfromthesaleofmerchandise,theperformanceofservices,therentalofproperty,orthelendingofmoney.Revenuesusuallyresultinanincreaseinanasset.REVENUESRevenuesarethegross79EXPENSESExpenses

arethedecreasesinowners’(stockholders’)equitythatresultfromoperatingthebusiness.Theyarethecostofassetsconsumedorservicesusedintheprocessofearningrevenue.Examplesofexpensesincludeutilityexpense,rentexpense,suppliesexpense,andtaxexpense.Whenrevenuesexceedexpenses,netincomeresults.Whenexpensesexceedrevenues,anetlossresults.EXPENSESExpensesarethedecre80Gainsandlosses(con.)Gains:increaseinequityfromincidentalorperipheraltransactionsnotassociatedwiththecompany’smajororcentrallinesofbusiness,e.g.gainfromdisposaloffixedasset.Gainsandlosses(con.)Gains:i81GainsandlossesLosses:decreaseinequityfromincidentalorperipheraltransactionsnotassociatedwiththecompany’smajororcentrallinesofbusiness,e.g.lossfromdisposaloffixedasset.GainsandlossesLosses:decrea82ASSETSAssetsareresourcesownedbyabusiness.Theyarethingsofvalueusedincarryingoutsuchactivitiesasproduction,consumptionandexchange.Thecommoncharacteristicspossessedbyallassetsisthecapacitytoprovidefutureservicesorbenefitstotheentitiesthatusethem.ASSETSAssetsareresourcesown83LIABILITIESLiabilities

areclaimsagainstassets.Theyareexistingdebtsandobligations.Mostclaimsofcreditorsattachtototalenterpriseassetsratherthantothespecificassetsprovidedbythecreditor.LIABILITIESLiabilitiesarecla84Owner’sequityClaimonnetassetsOwner’sequity=totalassets-totalliabilitiesDifferentOE

Proprietorship

andpartnership:Capital(subdivisions:Capital;Drawing)

Corporation:Stockholders’equity

(subdivisions:Paid-incapital;Retainedearnings)Owner’sequityClaimonnetass85InvestmentsbyOwnersRevenuesOwners’EquityDrawingExpensesINCREASESANDDECREASESIN

OWNER