会计专业英文版教材配套教学课件（完整版）（文字可修改版）.ppt

;Chapter 1 Introduction to Accounting;;;;A sole proprietorship An unincorporated business only owned by one person. (1) The owner also acts as the manager. (2) The owner is personally liable for the debts of the business. If the business has financial difficulties, creditors can force the owner to sell his or her personal assets to pay for the business debts. (3) Its advantage is simplicity.;A partnership An unincorporated business owned by two or more persons voluntarily acting as partners. (1) The owners of a partnership, when unincorporated, are also personally liable for the debts of the business. (2) The partnership has the ability to raise larger amounts of capital investment from multiple owners. (3) The individuals are vital to the partnership, covenants are usually drawn up which makes it difficult for individual partners to exit the legal entity.; A corporation A business organization as a separate legal entity owned by stockholders. (1) Investors in a corporation receive shares of stock to indicate ownership claims. (2) Compared with sole proprietorships and partnerships, it is easy for corporations to raise larger amounts of funds. (3) Corporate stockholders have no personal liability to the legal entity and their risks are limited to their purchase amount only.;1.3 Business activities Three types of activity: Financing activity Investing activity Operating activity ; Financing activity A company has two primary sources to raise funds. One is borrowing money. Persons or entities to whom a company owes money are creditors. Amounts owed to creditors are called liabilities. A creditor has a legal right to be paid at the agreed-upon time. The other is issuing shares of stock in exchange for cash. Selling shares of stock to investors in exchange for ownership rights. The total amount paid in by stockholders is ownership of shares of common stock and called paid-in capital. Stockholders have no legal right to expect any payments on a regular basis.