Accounting English 1-5章加期末复习讲义.ppt

1.2 The Accounting Professional 1.3 Accounting as an Information System 1.4 Accounting Principles and Concepts 1.5 Basic Elements of Financial Position: The Accounting Equation 江西外语外贸职业学院 徐维红 Liabilities Definition: Liabilities are amounts owed to outsiders. Kinds of liabilities: notes payable, accounts payable, wages payable . Capital Definition: Capital is the interest of the owners in an enterprise and also it is known as owner’s equity(所有者权益). If there are no liabilities, the capital is equal to the total amounts of the assets. Revenue Revenue: the price of goods sold and services rendered during a given accounting period. It represents the inflow of money, it can be defined as increase in economic resource, either through increase to assets or reductions to liability. (代表现金流入，通过增加资产或减少负债来增加经济资源) When revenue is earned, the assets are increased and capital is increased too. Cash or accounts receivable Expense Expense: Expenses are the cost of the goods and services used up in the process of earning revenue. Expenses include all expenses or resources consumed in obtaining revenue. An expense can be either a decrease in assets or an increase in liability ( 赚取收入时花费掉的费用，花费可以是资产的减少和负债的增加） Common examples of expenses: office rent, salaries of employees, telephone services, many types of taxes. 2.1 The account Definition: An account may be defined as a record of the increases, decreases, and balances in an individual item of asset, liability, capital, income (revenue), or expense. Example 1 Example 2 2.2 The rules of debit and credit Expanded Accounting Equation Example 3 Transaction(1) Mr.Himes invested $4000 in cash to open his practice. Transaction(2) Bought office supplies for cash, $300. Transaction(3) Bought office furniture from Stanley Company on account, $2000. Transaction(4) Received $2500 in fees earned during the mouth. Transaction(5) Paid office rent for March, $500. Transaction(6) Paid salary for part-time help,$200. Tran