会计的概念FINANCIAL ACCOUNTING REPORTS.docVIP

FINANCIAL ACCOUNTING REPORTS Reports from the accounting information system prepared for external or outside users. E.g. Suppliers, lenders, shareholders, auditors and government departments such as the Tax Office. ?MANAGEMENT ACCOUNTING REPORTS Reports from the accounting information system prepared for internal users. E.g. Directors, managers, internal auditors and employees. ?ASSET Assets are economic resources that are owned by the business and are expected to benefit future operations. e.g. cash, debtors, inventory, Land, Buildings, Machinery ?LIABILITY Liability is an obligation to make a future payment to another entity as a result of an economic transaction that has already occurred. E.g. an obligation to repay a prior loan. ?OWNER扴 EQUITY Owners?equity represents the owners?claims on the assets of the business. It is equal to asset minus liability. ?ACCOUNTING EQUATION (Balance sheet equation) Assets?燣iabilities?燨wners?Equity ?REVENUE Revenues are inflows or future benefits in the form of an increase in assets or a decrease in liabilities during the accounting reporting period. ?EXPENSE An expense is a transaction within the accounting information system which that diminishes assets and/or increases liabilities of the entity. ?PROFIT/LOSS (Profit and loss statement equation) Within the accounting information system, there is a core accounting equation REVENUE - EXPENSE = PROFIT OR LOSS. A profit is made when the revenue of doing business exceeds the expenses that the business incurs in earning that revenue. A loss is incurred when the expenses of doing business exceed the revenue that the business generates. ?REVENUE RECOGNITION PRINCIPLE An entity earns revenue by the provision of goods or services to outside parties/other entities. The recognition and recording of revenue received should only be recognized 1) when the earning process is substantially complete, and 2) when the receipt for the goods and services are reasonably certain. ?MA