Chapter 1 – Accounting &201.ppt

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1、Chapter1–Accounting&201TheLinkBetweenBusinessandAccountingLearningObjectivesDefineaccounting,whyimportant?UsersofaccountingFinancialStatementstandardsFourFinancialStatementsAnalysis!Risks!HowtoControl!Let’stalkaboutApples…No,Notthatkind…..AppleComputer!Howdotheydoit?TheOperatingCycleforApple…Ac

2、countingistheprocessofIdentifyingMeasuringandCommunicatingFinancialInformationtovarioususers,bothinsideandoutsideofthecompanyMuchofthisinformationiscommunicatedwithFinancialStatementsTheBasicFinancialStatementsBalanceSheetIncomeStatementStatementofChangesinOwners’EquityStatementofCashFlowsTheFi

3、nancialStatementsarebasedonabroadsetofguidelinescalledGenerallyAcceptedAccountingPrinciples(GAAP)SettingtheGuidelinesforFinancialReportingInternalUsersuseManagerialAccountingStatementsWhoaretheinternalusers?Whatinformationdotheylookfor??ExternalUsersuseFinancialAccountingWhoaretheexternalusers

4、?Whatinformationdotheylookfor??Business—whattype?Dimsum!AnEXERCISE...TheBalanceSheetDescribesthefinancialpositionofacompanyataspecificpointintimeThreeComponentsoftheBalanceSheetAssetsLiabilitiesOwners’EquityAssetsThingsofValue,resourcesOwnedbytheCompanyAsaresultofpasttransactionsWillbeusedtogen

5、eratefuturerevenuesLiabilitiesAmountsthebusinessowestocreditorsClaimsagainsttheAssetsOwners’EquityAmountsthebusinessowestoitsownersResidualclaimagainsttheAssetsAfterthecreditors’claimshavebeensatisfiedAssets-Liabilities=Owners’EquityWantmoreEquity?You’llneedto…..InvestMore–IncreasestheContribut

6、edCapitalportionofEquityEarnMore–RunningasuccessfulbusinessincreasestheRetainedEarningsportionofEquityTheAccountingEquationAssets=Liabilities+Owners’EquityStatesthatalloftheassetsofthebusinessareclaimedbythecreditorsand/ortheownersThisiswheretheAlgebracomesinApple’sBalanceSheetTheAccountingEqu

7、ationIsalsocalledtheBalanceSheetEquationTheBalanceSheetTotalAssetsof$8,050$2,974oftheAssetsareclaimedbythecreditors$5,076oftheAssetsareclaimedbytheshareholdersTheownersinvested$2,514MAndtheinvestmenthasgrownto$5,076MThinkofitasani