Fundamental Accounting Principles基本会计原则.pptVIP

Learning objectives 1. Why accounting? 2. What is accounting? 3. Ethics in accounting 4. Accounting model / Accounting equation 5. Transaction analysis and recording 6. Financial Statement 7. Decision analysis: ROE ROA Case: Coca Cola, Pepsi Cadbury Schweppes 1. Why accounting? 2. What is accounting Language of business Help users to make better decision Information and measurement system To identify, record, and communicate business activities Provide relevant, reliable, and comparable information 2. What is accounting 2. What is accounting Financial and Managerial accounting 3. Ethics in Accounting 4. Accounting principles General principles: basic assumptions, concepts, and guidelines for preparing financial statements. Specific principles: detailed rules used in reporting business transactions and events. GAAP FASB and SEC Setting Accounting Principles Hong Kong: Hong Kong Institute of Certified Public Accountants (HKICPA) China Ministry of Finance People’s Republic of China International Accounting Standard Board (IASB) International Financial Reporting Standards (IFRS) Principles of Accounting Principles of Accounting Business Entity Forms Characteristics of Businesses Corporation 4. Accounting Equation Accounting Equation Assets Resources with future benefits that are owned or controlled by a company. Liabilities Source of fund from creditors What a company owes its creditors of future products or services. Equity Source of fund from owners The claims of its owners Assets: Resources owned or controlled by a business Liabilities: creditors’ claim on assets. Equity: the owner’s claim on assets. Expanded Accounting Equation Expanded Accounting Equation Revenues: gross increase in equity from a company’s earnings activities. Expenses: the cost of assets or services used to earn revenue. Expenses decrease owner’s equity. Owner investments: the assets an owner puts into the company. Owner withdrawals: the assets take away from the co