会计学原理(英文授课)课堂PPTChapter1研讨.ppt

FORMS OF BUSINESS ENTITIES Sole Proprietorship Partnership Corporation * Proprietorships and partnerships that are set up as LLCs provide limited liability. CHARACTERISTICS OF BUSINESSES * * Owners of a corporation are called shareholders (or stockholders). Shareholders are not personally liable for corporate acts. When a corporation issues only one class of stock, wecall it common stock (or capital stock). CORPORATION SARBANES-OXLEY (SOX) Congress passed the Sarbanes-Oxley Act to help curb financial abuses at companies that issue their stock to the public. Management must issue a report stating that internal control are effective. Auditors must verify the effectiveness of internal controls. Company Alleged Accounting Abuses Enron Inflating income, hid debt, and bribed officials WorldCom Understated expenses to inflate income and hid debt Fannie Mae Inflated income Adelphia Communications Understated expenses to inflate income and hid debt AOL Time Warner Inflated revenues and income Xerox Inflated income Bristol-Myers Squibb Inflated revenues and income Nortel Networds Understated expenses to inflate income TRANSACTION ANALYSIS AND THE ACCOUNTING EQUATION Assets = Liabilities + Equity Accounting Equation A1 Land Equipment Buildings Cash Vehicles Store Supplies Notes Receivable Accounts Receivable Resources owned or controlled by a company ASSETS A1 Taxes Payable Wages Payable Notes Payable Accounts Payable LIABILITIES Creditors’ claims on assets A1 Equal to Assets MinusLiabilities(Net Assets) EQUITY Owner’s Claims on Assets A Liabilities Equity Assets = + EXPANDED ACCOUNTING EQUATION Revenues Expenses Owner Capital Owner Withdrawals _ + _ Owners Equity Liabilities Equity Assets = + A1 TRANSACTION ANALYSIS EQUATION The accounting equation MUST remain in balance after each transaction. Liabilities Equity Assets = + A2 TRANSACTION ANALYSIS The accounts involved are: (1) Cash (asset) (2) Owner Capital (equity) Chuck Taylor invests $30,000 cash to start