中山大学 会计学课件Chapter_01.pptVIP

* Listed on your screen are four fundamental principles of accounting. The revenue recognition principle states that revenue is to recognized when it is earned, that the revenue need not be in for form of cash and that we measure revenue by the cash received plus cash value of other items received. The cost principle tell us that accounting information is based upon actual cost incurred. We refer to this cost as historical cost. The matching principle dictates that expenses incurred by a company must be matched against revenue generated as a result of those expenses. The full disclosure principle states that a company is required to report the details behind the financial statements if the details so disclosed would impact the users’ decision making process. Most of the details are reported in the notes to the financial statements. * Now we will look at four fundamental assumptions of accounting. The going-concern assumption states that, in the absence of information to the contrary, the business entity is assumed to continue operations into the foreseeable future. The monetary unit principle tells us that we will only record accounting information that can be expressed in monetary units, usually dollars in the United States. The business entity assumption tells us that we must separate out the transaction of individual owners of a business from those of the business. Finally, the time period assumption presumes that the life of a company can be divided into time periods such as months and years, and that useful reports can be prepared for those periods. * There are three general forms of business operations. A sole proprietorship is a business owned by just one individual. A partnership is owned by two or more individuals. Some partnerships have several thousand partners. A corporation is owned by individuals who normally are not active in the day-to-day operations of that business. For example, you may become an owner of IBM by purchasing shares of stock on the N