专英课件.ppt

ppppppppp The Financial Statements Chapter 1 Accounting... Accounting... Financial Statements Users of Accounting Information Fields of Accounting The Authority Underlying Accounting Standards of Professional Conduct Types of Business Organizations Proprietorships What are some advantages? total undivided authority no restrictions on type of business – must be legal What are some disadvantages? unlimited liability limitation on size – fund raising power Partnerships ? What are some advantages? ? What are some disadvantages? unlimited personal liability for general partners need for written partnership agreement Corporations ? What are some advantages? separate legal existence limited liability of stockholders transferability of ownership relatively easy ? What are some disadvantages? taxes – possible double taxation extensive governmental regulation Generally AcceptedAccounting Principles What is the primary objective of financial reporting? The Entity Concept Example Assume that John decides to open up a gas station and coffee shop. The gas station made $250,000 in profits, while the coffee shop lost $50,000. The Entity Concept Example How much money did John make? At a first glance, we would assume that John made $200,000. However, by applying the entity concept we realize that the gas station made $250,000 while the coffee shop lost $50,000. The Reliability (Objectivity) Principle The Cost Principle The Going Concern Concept The Stable-Monetary-Unit Concept The Accounting Equation Assets What is an asset? It is something a company owns which has future economic value. land building equipment goodwill Liability What is a liability? It is something a company owes. money service – legal retainers product – magazines Owner’s Equity What is owner’s equity? It is what’s left of the assets after liabilities have been deducted. the same as net assets the owner’s claim on the entity’s assets Transactions that AffectOwner’s Equity Revenues What are revenues? They are am