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1、Fundamental-Fundamental-Financial-Accounting-Financial-Accounting-Concepts-Edmonds-Concepts-Edmonds-Chapter-1-An-Chapter-1-An-introduction-to-introduction-to-accountingaccounting课件课件LO1Explain the role of accounting in society.LO12RoleofAccountinginSocietyShould I invest money in Apple or Google?3Te
2、rm:Accounting会计Def:Aninformationsystemthatreportsontheeconomicactivitiesandfinancialconditionofabusinessorotherorganization. p. 3(Service-basedprofessiondevelopedtoprovidereliableandrelevantfinancialinformationusefulinmakingdecisions.)1-44RoleofAccountinginSocietyAccounting provides information that
3、 is useful in answering questions about resource allocation.Should I invest money in Apple or Google?5Market-BasedAllocationsA market is a group of people or entities organized to exchange items of value.600733599047Market-BasedAllocationsCommon terms for the added value created in the transformatio
4、n process:ProfitIncome Earnings 8Term:profit-利润Def:Valueaddedbytransformingresourcesintoproductsorservicesdesiredbycustomers.p. 41-99Term:income-收益Def:Increaseinvaluecreatedbyprovidinggoodsandservicesthroughresourcetransformation.p. 41-1010Term:earnings盈利，盈余，收益Def:Thedifferencebetweenrevenuesandexpe
5、nses.Sometimescalledprofit. p. 41-1111Q1-11-1212FinancialResourcesConversion agents need financial resources (money) to establish and operate their businesses.InvestorsCreditors13PhysicalResourcesIn their most primitive form, physical resources are called natural resources. Owners of physical resour
6、ces seek to sell those resources to profitable businesses which are able to pay higher prices and make repeat purchases.14LaborResourcesLabor resources include both intellectual and physical labor.Workers seek relationships with businesses that have high earnings potential because these businesses a
7、re better able to pay high wages.15Q1-21-1616Q1-31-1717TypesofAccountingInformationFinancial AccountingFocused on the needs of external usersManagerial AccountingFocused on the needs of internal users18Non-businessResourceAllocationNot all entities allocate resources based on profitability. Organiza
8、tions that are not motivated by profit are called not-for-profit entities. Government, foundations, religious groups, the Peace Corps, and various benevolent organizations allocate resources based on humanitarian concerns.19209/5/202421MeasurementRulesThe Financial Accounting Standards Board （财务会计准则
9、委员会（财务会计准则委员会(美国美国)）establishes measurement and reporting rules that businesses use to facilitate communication.Generally Accepted Accounting Principles(一般公认会计原则一般公认会计原则)22ReportingEntitiesFinancial accounting reports disclose the financial activities of particular individuals or organizations descr
10、ibed as reporting entities. Each entity is treated as a separate reporting unit.23Term:reportingentities报告主体，会计主体Def:Businessesorotherorganizationsforwhichfinancialstatementsareprepared.p. 81-2424Q1-41-2525Q1-51-2626LO2Construct an accounting equation and show how business events affect the equation
11、.LO227ElementsofFinancialStatementsThe elements represent broad categories.1.Assets2.Liabilities3.Equity4.Contributed Capital5.Revenue6.Expenses7.Distributions8.Net Income9.Gains10.LossesWe will discuss elements 1-8 in this chapter. We will save elements 9 and 10 for a later chapter.28Term:asset资产De
12、f:Theresourcesabusinessusestomakemoney. p. 11(Economicresourceusedtoproducerevenuewhichisexpectedtoprovidefuturebenefittothebusiness.)1-2929Term:liabilities负债，责任Def:Theobligationsabusinesshastoitscreditors. p. 11(Obligationsofabusinesstorelinquishassets,provideservices,oracceptotherobligations.)1-30
13、30Term:stockholdersequity股东权益Def:Thebusinessscommitmenttothestockholders. p. 12(Theinterestinacorporationsassetsthatisownedbythestockholders.)1-3131Term:commonstock普通股Def:Thespecificcommitmentsmadetotheinvestorsaredescribedincertificatescalledcommonstock. p .12(Basicclassofcorporatestockthathasnopre
14、ferentialclaimonassetsordividends;certificatesthatevidenceownershipinacompany.)p1-3232Term:revenue收入Def:Theeconomicbenefit(increaseinassetsordecreaseinliabilities)acompanyderivesfromprovidinggoodsandservicestoitscustomers.pp. 14, 861-3333Term:expense费用，支出Def:Aneconomicsacrifice(decreaseinassetsorinc
15、reaseinliabilities)abusinessincursintheprocessofgeneratingrevenue.pp. 15, 751-3434Term:dividend红利，股息Def:Ifabusinesstransferssomeorallofitsearnedassetstoowners,thetransferiscalledadividend. pp. 15(Transferofwealthfromabusinesstoitsowners.)1-3535Term:netincome净收益，净利Def:Ifrevenuesexceedexpenses,thediff
16、erenceiscallednetincome.p. 211-3636Term:retainedearnings留存收益Def:Theincreaseinthebusinessscommitmentstoitsstockholders. p. 12(Portionofstockholdersequitythatincludesallearningsretainedinthebusinesssinceinception(revenuesminusexpensesanddistributionsforallaccountingperiods).1-3737ElementsofFinancialSt
17、atements1.AssetsCash, Equipment, Buildings, Land2.Liabilities3.Equity4.Contributed Capital5.Revenue6.Expenses7.Distributions8.Net Income9.Gains10.LossesSubclassifications(细分类细分类)of the elements are frequently called accounts.Accounts are reported in the financial statements.38Term:account账户Def:Detai
18、ledinformationabouttheelementsismaintainedinrecords. p. 10(Recordofclassifiedandsummarizedtransactiondata;componentoffinancialstatementelements.)1-3939Q1-61-4040AccountingEquationClaims on the assets are from two sources: 1.Creditors (liabilities) 2.Investors or owners (equity)41Term:claims要求权，要求而得到
19、的东西Def:Ownersandcreditorsinterestsinabusinesssassets.p. 121-4242Term:accountingequation会计等式Def:Therelationshipbetweenabusinesssassetsandtheclaimsonitsassetsisfrequentlyexpressedinanequality. p. 12(Algebraicrelationshipbetweenacompanysassetsandtheclaimsonthoseassets,representedasAssets=Liabilities+Eq
20、uity.)p. 121-4343AccountingEquation44AccountingEquationCommon Stock + Retained Earnings 45Q1-81-4646Q1-9a1-4747Q1-101-4848Q1-11a1-4949Q1-121-5050RecordingBusinessEventsUndertheAccountingEquation AccountingEventTransaction1.Source2.Exchange3.Use51Term:accountingevent会计事项Def:Economicoccurrencethatchan
21、gesacompanysassets,liabilities,orequity.p. 131-5252Term:transaction交易Def:Businesseventthatinvolvestransferringsomethingofvaluebetweentwoentities.p. 131-5353AssetSourceTransactions Businesses obtain assets from three sources: 1.Owners2.Creditors3.Profitable Operations54Q1-131-5555Event 1: Rustic Camp
22、 Sites (RCS) was formed on January 1, 2016, when it acquired $120,000 cash from issuing common stock.1.RCS increases assets (cash).2.RCS increases stockholders equity (common stock).Asset Source TransactionDouble-Entry BookkeepingRecorded in Two Places56Q1-141-5757Event 2: RCS acquired an additional
23、 $400,000 of cash by borrowing from a creditor.1.RCS increases assets (cash).2.RCS increases liabilities (notes payable).Asset Source Transaction58Q1-151-5959Event 3: RCS paid $500,000 cash to purchase land.1.RCS decreases assets (cash).2.RCS increases assets (land).Asset Exchange Transaction60Q1-16
24、1-6161Event 4: RCS obtained $85,000 cash by leasing campsites to customers.1.RCS increases assets (cash).2.RCS increases stockholders equity (retained earnings).Asset Source Transactionrevenues62Q1-17a1-6363Event 5: RCS paid $50,000 cash for operating expenses such as salaries, rent, and interest.1.
25、RCS decreases assets (cash).2.RCS decreases stockholders equity (retained earnings).Asset Use Transactionexpenses64Q1-181-6565Q1-19a1-6666Event 6: RCS paid $4,000 in cash dividends to its owners. 1.RCS decreases assets (cash).2.RCS decreases stockholders equity (retained earnings).Asset Use Transact
26、iondividends67Q1-201-6868Event 7: The land that RCS paid $500,000 to purchase had an appraised market value of $525,000 on December 31, 2016.Historical Cost Concept（历史成本原则）Requires that most assets be reported at the amount paid for them (their historical cost) regardless of increases in market valu
27、e.Reliability Concept（可靠性原则）Information is reliable if it can be independently verified. Appraised values are opinions and will vary from appraiser to appraiser.69Q1-221-7070Q1-23a1-7171Q1-251-7272Q1-261-7373LO5Interpret information shown in an accounting equation.LO374The Left versus the Right Side
28、 of the Accounting Equation1.Educate, Inc. purchases land for $2,000 cash.2.After the purchase, the company has zero cash.Liabilities, common stock and retained earnings are not cash.3. The right side of the equation represents sources of the companys assets.75Cash and Retained EarningsCreative Asso
29、ciates sells its land for $1,900.Although the company has $2,300 in cash, it may only pay $600 in dividends.Retained earnings does not represent cash, but it can limit dividends.76LO7Classify business events as asset source, use, or exchange transactions.LO477Recap:TypesofTransactionsThe described t
30、ransactions have been classified into one of three categories:Asset SourceAsset ExchangeAssetUse Increase total assets, increase total claimsIncrease one asset, decrease another assetDecrease total assets, decrease total claims78SummaryofTransactionsNow, lets prepare the financial statements for RCS
31、 using the data presented above. 79LO8Prepare an income statement, a statement of changes in stockholders equity, and a balance sheet.LO580PreparingFinancialStatementsNet LossAccounting PeriodMatching Conceptresults when expenses exceed revenues.Revenues exceeded expenses.Income is measured for a sp
32、an of time called theRevenues are matched to expenses.81Term: incomestatement利润表Def: Theincomestatementmatchesrevenuewiththeexpensesthatwereincurredtogeneratetherevenue.p. 21(Financialreportofprofitability;measuresthedifferencebetweenrevenuesandexpensesfortheaccountingperiod(whetherornotcashhasbeene
33、xchanged).)1-8282Term:accountingperiod会计期间Def:Timespancoveredbythefinancialstatements;normallyoneyear,butmaybeaquarter,amonth,orsomeothertimeinterval.p. 211-8383PreparingFinancialStatements84Term:statementofchangesinstockholdersequity股东权益变动表Def:Statementthatsummarizesthetransactionsthataffectedtheow
34、nersequityduringtheaccountingperiod.p. 23 1-8585PreparingFinancialStatementsequalAssets are displayed in order of liquidity.86Term:balancesheet资产负债表Def:Financialstatementthatreportsacompanysassetsandthecorrespondingclaims(liabilitiesandequity)onthoseassetsasofaspecificdate(usuallyasoftheendoftheacco
35、untingperiod).p. 231-8787LO8Prepare a statement of cash flows.LO688OperatingInvestingFinancingPreparingFinancialStatements89Term:statementofcashflows现金流量表Def:Thefinancialstatementthatreportsacompanyscashinflowsandoutflowsforanaccountingperiod,classifyingthemasoperating,investing,orfinancingactivitie
36、s.p. 241-9090LO8Explain the closing process.LO791TheClosingProcessTransfers net income (or loss) and dividends to Retained Earnings.Establishes zero balances in all revenue, expense, and dividend accounts. 92TemporaryandPermanentAccountsTemporary accounts track financial results for a limited period
37、 of time.RevenuesExpensesDividendsTemporaryAccountsPermanent AccountsAssetsLiabilitiesEquityPermanent accounts track financial results from year to year.93LO9Record business events using a horizontal financial statements model.LO894HorizontalFinancialStatementsModel95RealWorldFinancialReportsService
38、 BusinessesMerchandising BusinessesManufacturing Businesses96AnnualReports(1)Financial Statements(2)Notes (3)Auditors Report Chapter 6(4)Managements Discussion and Analysis (MD&A)Traditionally, large companies have distributed expensive annual reports with many color photographs. Increasingly, howev
39、er, companies are issuing more modest annual reports or are simply distributing their 10-K reports. 97SpecialTermsinReal-WorldReportsThe financial statements of real-world companies include numerous items relating to advanced topics that are not covered in introductory accounting textbooks. However, we encourage you to look for annual reports in the library, from your employer, or on the Internet. The best way to learn accounting is to use it.98EndofChapterOne99结束结束
