Basic Bookkeeping Standards.


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Acquired Supplies of $200 and Equipment of $1,000 on record. ... Keep in mind that the parity in the pay rates cost account really increments. ...
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Fundamental Accounting Principles Wild/Larson/Chiappetta eighteenth Edition

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Chapter 1 Accounting in Business

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Conceptual Chapter Objectives C1: Explain the reason and significance of accounting in the data age C2: Identify clients and employments of bookkeeping C3: Identify opportunities in bookkeeping and related fields C4: Explain why morals are vital in bookkeeping C5 : Explain the importance of GAAP, and characterize and apply a few key bookkeeping standards C6: Appendix 1B: Identify and depict the three noteworthy exercises in associations

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Analytical Chapter Objectives A1: Define and translate the bookkeeping mathematical statement and each of its parts A2: Analyze business exchanges utilizing the bookkeeping comparison A3: Compute and decipher return on resources A4: Appendix 1A: Explain the connection amongst return and hazard

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Procedural Chapter Objectives P1: Identify and plan essential money related proclamations and clarify how they interrelate

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is a framework that data that is Importance of Accounting C1 Accounting Identifies Records Relevant Communicates Reliable to help clients settle on better choices. Practically identical

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Accounting Activities C 1 Identifying Business Activities Recording Business Activities Communicating Business Activities

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Internal Users External Users Lenders Shareholders Governments Consumer Groups External Auditors Customers Managers Officers/Directors Internal Auditors Sales Staff Budget Officers Controllers Users of Accounting Information C 2

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External Users Financial bookkeeping gives outside clients money related articulations. Clients of Accounting Information C 2 Internal Users Managerial bookkeeping gives data needs to inward leaders.

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Financial Managerial Taxation Preparation Analysis Auditing Regulatory Consulting Planning Criminal examination General bookkeeping Cost bookkeeping Budgeting Internal inspecting Consulting Controller Treasurer Strategy Preparation Planning Regulatory Investigations Consulting Enforcement Legal administrations Estate arranges Lenders Consultants Analysts Traders Directors Underwriters Planners Appraisers FBI specialists Market scientists Systems architects Merger administrations Business valuation Human administrations Litigation bolster Entrepreneurs Accounting-related Opportunities in Accounting C 3

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Accounting Jobs by Area C 3

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Ethics—A Key Concept C 4 Beliefs that recognize right from wrong Accepted models of good and awful conduct

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Guidelines for Ethical Decisions C 4 Make moral choice Identify moral concerns Analyze choices Use individual morals to perceive moral concern. Consider all great and awful results. Pick best choice in the wake of measuring all results.

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Relevant Information Affects the choice of its clients. Dependable Information Is trusted by clients. Equivalent Information Is useful in differentiating associations. Sound accounting guidelines C 5 Financial bookkeeping practice is administered by ideas and standards known as proper accounting rules (GAAP) .

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Setting Accounting Principles C 5 Financial Accounting Standards Board is the private gathering that sets both wide and particular standards . The Securities and Exchange Commission is the administration amass that sets up reporting necessities for organizations that issue stock to the general population . The International Accounting Standards Board (IASB) issues International Financial Reporting Standards that recognize favored bookkeeping rehearses.

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Now Future Objectivity Principle Accounting data is bolstered by autonomous, fair-minded confirmation. Fetched Principle Accounting data depends on real cost. Going-Concern Principle Reflects presumption that the business will keep working as opposed to being shut or sold. Standards of Accounting C 5

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Revenue Recognition Principle Recognize income when it is earned. Continues need not be in real money. Measure income with money got in addition to money estimation of things got. Financial Unit Principle Express exchanges and occasions in fiscal, or cash, units. Business Entity Principle A business is represented independently from different business elements, including its proprietor. Standards of Accounting C 5

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Sole Proprietorship Partnership Corporation Business Entity Forms C 5

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* Characteristics of Businesses C 5 * Proprietorships and organizations that are set up as LLCs give restricted risk.

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Owners of a partnership are called shareholders (or stockholders ). At the point when a company issues stand out class of stock, we call it capital stock. Partnership C 5

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Accounting Equation A1 EQUITY = + Assets Liabilities Equity

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Sarbanes-Oxley Act Also known as SOX Passed by Congress to check money related misuse at organizations that offer stock to people in general Requires bookkeeping oversight and stringent inside controls Penalties incorporate securities exchange delisting and criminal indictment

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Assets A1 Cash Accounts Receivable Notes Receivable Resources possessed or controlled by an organization Vehicles Land Buildings Store Supplies Equipment

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Liabilities A1 Accounts Payable Notes Payable Creditors\' cases on resources Wages Payable Taxes Payable

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Equity A1 Owner Investments CAPITAL

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Assets Liabilities Equity _ = + Owner Capital Owner Withdrawals + Revenues Expenses = + Assets Liabilities Equity Owner\'s Equity Expanded Accounting Equation A1

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The bookkeeping mathematical statement MUST stay in equalization after every exchange. = + Assets Liabilities Equity Transaction Analysis Equation A2

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The records included are: (1) Cash (resource) (2) Owner Capital (value) Transaction Analysis A2 J. Scott contributes $20,000 money to begin the business .

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Transaction Analysis A2 J. Scott contributes $20,000 money to begin the business.

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The records included are: (1) Cash (resource) (2) Supplies (resource) Transaction Analysis A2 Purchased supplies paying $1,000 money.

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Transaction Analysis A2 Purchased supplies paying $1,000 money.

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The records included are: (1) Cash (resource) (2) Equipment (resource) Transaction Analysis A2 Purchased gear for $15,000 money.

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Transaction Analysis A2 Purchased hardware for $15,000 money .

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Transaction Analysis A2 Purchased Supplies of $200 and Equipment of $1,000 on record. The records included are: (1) Supplies (resource) (2) Equipment (resource) (3) Accounts Payable (risk)

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Transaction Analysis A2 Purchased Supplies of $200 and Equipment of $1,000 on record.

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Transaction Analysis A2 Borrowed $4,000 from first American Bank. The records included are: (1) Cash (resource) (2) Notes payable (risk)

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Transaction Analysis A2 Borrowed $4,000 from first American Bank.

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Transaction Analysis A2 The parities so far show up beneath. Note that the Balance Sheet Equation is still in equalization.

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Transaction Analysis A2 Now, how about we take a gander at exchanges including income, costs and withdrawals.

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Transaction Analysis A2 Provided counseling administrations accepting $3,000 money. The records included are: (1) Cash (resource) (2) Revenues (value)

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Transaction Analysis A2 Provided counseling administrations accepting $3,000 money.

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Transaction Analysis A2 Paid pay rates of $800 to representatives. The records included are: (1) Cash (resource) (2) Salaries cost (value) Remember that the parity in the pay rates cost account really increments. In any case, value diminishes in light of the fact that costs decrease value.

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Transaction Analysis A2 Paid pay rates of $800 to workers. Keep in mind that costs diminish value.

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Transaction Analysis A2 A withdrawal of $500 is made by the proprietor. The records included are: (1) Cash (resource) (2) Withdrawals (value) Remember that the withdrawal account really increments. However, add up to value diminishes in light of the fact that the withdrawal decreases value.

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Transaction Analysis A2 A withdrawal of $500 is made by the proprietor. Keep in mind that withdrawals diminish value.

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Financial Statements P1 Let\'s set up the Financial Statements mirroring the exchanges we have recorded. Salary Statement of Owner\'s Equity Balance Sheet Statement of Cash Flows

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Income Statement P1 Net pay is the contrast amongst Revenues and Expenses. The salary proclamation portrays an organization\'s incomes and costs alongside the subsequent net pay or misfortune over a timeframe because of profit exercises.

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Statement of Owner\'s Equity P1 The net salary of $2,200 builds Owner\'s Equity by $2,200.

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Balance Sheet P1 The Balance Sheet portrays an organization\'s money related position at a point in time.

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Statement of Cash Flows P1

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Return on resources Net salary Average aggregate resources = Return on Assets (ROA) A3 ROA is seen as a pointer of working effectiveness.

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End of Chapter 1

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