Accounting-Lesson 3 Accounting Elements.pptVIP

Lesson Three:Accounting Elements 3-1 Assets, Liabilities and Equity operating cycle current assets intangible assets receivables prepayments inventory finished goods semifinished goods goods in process Container Low-value and perishable articles 3-2 Revenue, Expenses and Profit Basic operating revenue other operating revenue Long-term project contract The completed progress method The completed contract method Return of sales Sales allowances Sales discount Outlay Norm costing Planned costing Cost variance Reading Material: The Forms of Business Organizations Three/Four forms: Sole proprietorship Partnership General partnership Limited partnership Corporation owned and managed by one person; the individual proprietor has the ultimate responsibility and authority for all decisions; no legal formalities are necessary to create it; low taxes and fees; personally liable for the debts (limitless liability). partners agree to share in the profits, loss and assets; agreement upon duties and liabilities of the partners and a fiduciary relationship exists between them; Each partner is personally liable for the debts (limitless liability) similar to a general partnership in certain aspects and similar to a corporation in others; one or more of the partners has only limited liability for partnership debts and obligations and limited authority of participating in management. Created under a particular business statute; Owned by one or more shareholders, who may be natural persons or other legal entities; Its existence is entirely distinct from that of its owners; Shareholders are generally not liable for corporate obligations (limited liability); Strict statutory formalities. Considerations of the selection of the most advantageous form of organization: Continuity of existence Transferability of ownership interest Capital and credit requirements Tax considerations Sole proprietorship: the death of the sole proprietor, maybe granting the heirs the right to continue. Ge