Professional Documents
Culture Documents
Chapter 1
Accounting
Identifying
Select transactions and events
Recording
Input, measure and classify
Communicating
Prepare, analyze and interpret
McGraw-Hill/Irwin Slide 2
C2
USERS OF ACCOUNTING
INFORMATION
McGraw-Hill/Irwin Slide 3
C2 USERS OF ACCOUNTING
INFORMATION
McGraw-Hill/Irwin Slide 4
C3
OPPORTUNITIES IN ACCOUNTING
Financial Managerial Taxation
•Preparation •General accounting •Preparation
•Analysis •Cost accounting •Planning
•Auditing •Budgeting •Regulatory
•Regulatory •Internal auditing •Investigations
•Consulting •Consulting •Consulting
•Planning •Controller •Enforcement
•Criminal •Treasurer •Legal services
investigation •Strategy •Estate plans
Accounting-related
•Lenders •FBI investigators
•Consultants •Market researchers
•Analysts •Systems designers
•Traders •Merger services
•Directors •Business valuation
•Underwriters •Human services
•Planners •Litigation support
McGraw-Hill/Irwin •Appraisers •Entrepreneurs Slide 5
ACCOUNTING JOBS BY AREA
C3
Private
Public accounting
accounting 60%
25%
Government,
not-for-profit,
& education
15%
McGraw-Hill/Irwin Slide 6
C4
ETHICS - A KEY CONCEPT
McGraw-Hill/Irwin Slide 7
C4
McGraw-Hill/Irwin Slide 9
C5
SETTING ACCOUNTING PRINCIPLES
McGraw-Hill/Irwin Slide 11
C5
PRINCIPLES AND ASSUMPTIONS
OF ACCOUNTING
Now Future
Going-Concern Assumption Monetary Unit Assumption
Express transactions and events in
Reflects assumption that the business
monetary, or money, units.
will continue operating instead of being
closed or sold.
McGraw-Hill/Irwin Slide 13
CHARACTERISTICS OF BUSINESSES
Characteristic Proprietorship Partnership Corporation
Business entity yes yes yes
Legal entity no no yes
Limited liability no* no* yes
Unlimited life no no yes
Business taxed no no yes
One owner allowed yes no yes
McGraw-Hill/Irwin Slide 14
CORPORATION
McGraw-Hill/Irwin Slide 15
SARBANES-OXLEY (SOX)
Congress passed the Sarbanes-Oxley Act to help curb financial abuses at
companies that issue their stock to the public. Management must issue a report
stating that internal control are effective. Auditors must verify the effectiveness of
internal controls.
McGraw-Hill/Irwin Slide 16
A1 TRANSACTION ANALYSIS AND THE
ACCOUNTING EQUATION
Accounting Equation
McGraw-Hill/Irwin Slide 17
A1
ASSETS
Cash
Accounts
Receivable(khoan Notes
phai thu cua
khach hang
Receivable
Resources
owned or
Vehicles controlled by Land
a company
Store Buildings
Supplies
Equipment
McGraw-Hill/Irwin Slide 18
A1
LIABILITIES
Accounts Notes
Payable Payable
Creditors’
claims on
assets
Taxes Wages
Payable Payable
McGraw-Hill/Irwin Slide 19
A
EQUITY
Owner’s
Claims on
Assets
Equal to
Assets Minus
Liabilities
(Net Assets)
McGraw-Hill/Irwin Slide 20
EXPANDED ACCOUNTING
EQUATION
A1
_ Owner _
Owner Capital
Withdrawals + Revenues Expenses
Owner's Equity
McGraw-Hill/Irwin Slide 21
TRANSACTION ANALYSIS
EQUATION
A2
McGraw-Hill/Irwin Slide 22
TRANSACTION ANALYSIS
A2
McGraw-Hill/Irwin Slide 23
TRANSACTION ANALYSIS
A2
McGraw-Hill/Irwin Slide 24
TRANSACTION ANALYSIS
A2
McGraw-Hill/Irwin Slide 25
TRANSACTION ANALYSIS
A2
McGraw-Hill/Irwin Slide 26
TRANSACTION ANALYSIS
A2
McGraw-Hill/Irwin Slide 27
TRANSACTION ANALYSIS
A2
$30,000 = $30,000
McGraw-Hill/Irwin Slide 28
TRANSACTION ANALYSIS
A2
McGraw-Hill/Irwin Slide 29
A2
TRANSACTION ANALYSIS
McGraw-Hill/Irwin Slide 30
TRANSACTION ANALYSIS
A2
McGraw-Hill/Irwin Slide 31
TRANSACTION ANALYSIS
A2
McGraw-Hill/Irwin Slide 33
P1
INCOME STATEMENT
McGraw-Hill/Irwin Slide 36
P1
STATEMENT OF CASH FLOWS
McGraw-Hill/Irwin Slide 37
A3
1A - RETURN AND RISK ANALYSIS
A4
McGraw-Hill/Irwin Slide 38
C6 1B - BUSINESS ACTIVITIES AND
THE ACCOUNTING EQUATION
There are three major types of activities in any organization:
1.Financing Activities – Provide the means organizations
use to pay for resources such as land, buildings, and
equipment to carry out plans.
2.Investing Activities - Are the acquiring and disposing of
resources (assets) that an organization uses to acquire and
sell its products or services.
3.Operating Activities – Involve using resources to research,
develop, and purchase, produce, distribute, and market
products and services.
McGraw-Hill/Irwin Slide 39
END OF CHAPTER 1
McGraw-Hill/Irwin Slide 40