chapter2会计英语.pptVIP

Chapter 2 The Accounting Equation and The Account Outline of Chapter 2 Types of Business Organizations The Accounting Equation The Effects of Business Transactions on the Accounting Equation The Account 2.1 Types of Business Organizations Three basic forms of business organizations: the proprietorship, the partnership and the corporation. 2.2 The Accounting Equation (1) Assets, Liabilities and Owner’s Equity Assets: the economic resources of a business that are expected to be benefit in the future. e.g.: cash, office supplies, merchandise, furniture, land, buildings Liabilities: “outsider claims” which are economic debt-payable to outsiders (called creditors). e.g.: accounts payable, wage payable, notes payable Owner’s Equity: “insider claims” which are held by the owners of the business. e.g.: capital 2.2 The Accounting Equation (2) Accounting Equation Assets = Liabilities + Owner’s Equity the most basic tool of accounting; shows the relationship among assets, liabilities and owner’s equity; another way: Assets - Liabilities = Owner’s Equity 2.3 The Effects of Business Transactions on the Accounting Equation (1)Transaction: any event that both affects the financial position of the business entity and may be reliably recorded. Question: Which of the following five events is transaction? (a) elections; (b) economic booms and recessions; (c) purchases and sales of merchandise inventory; (d) payment of rents; (e) collection of cash from customers. 2.3 The Effects of Business Transactions on the Accounting Equation Answer: (a) elections; (X) (b) economic booms and recessions; (X) (c) purchases and sales of merchandise inventory; (√) (d) payment of rents; (√) (e) collection of cash from customers; (√) 2.3 The Effects of Business Transactions on the Accounting Equation (2) Illustration NB.: Transaction analysis is the essence of accounting Transaction 1 J