PPT Accounting Information system

Accounting English @2011 6

1.5 Accounting and its profession

There are three basic types of accountants:
Private accountants work for a single employer. Public accountants are available to the public. Government accountants work for federal, provincial, and municipal agencies. ……
On May 1, 2001, Jill Jones deposited $8,000 in the bank to officially start JJ’s Lawn Care Service.
The Effects of Business Transactions
JJ's Lawn Care Service Balance Sheet May 1, 2001 Assets Owner's Equity $ 8,000 Jill Jones, capital $ 8,000

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Some accounting concepts and principles:



business entity objectivity cost principle going-concern monetary unit time period revenue recognition or realization principle matching principle full-disclosure principle consistency principle materiality principle conservatism principle

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Using the accounting equation
• (1)Recording (2)Reporting (Basic Steps of Accounting Processing) • Example on textbook
Accounting English @2011
Accounting
information
Actions (decisions)
Decision makers
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1.2 Forms of organization

Sole proprietorship

Owned by one person. The owner is responsible for the debts of proprietorship. Owned by two or more persons. Partners are personally responsible for all partnership debts.



The statement of cash flows shows the cash inflows and outflows from operating activities, investing activities, and financing activities.
Users of accounting information – investors and creditors etc.
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Fields of accounting


ห้องสมุดไป่ตู้
financial managerial taxation accounting-related
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1.6 Using the accounting equation
Chapter 1
An Introduction to Accounting
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1.1 Accounting is an information system
The accounting process
Economic activities
Accounting thinks decision makers with economic activities and with the results of their decisions.
The Effects of Business Transactions
JJ's Lawn Care Service Balance Sheet May 8, 2001 Assets Liabilities & Owner's Equity Cash $ 3,500 Notes payable $ 13,000 Tools & equipment 2,500 Owner's Equity Truck 15,000 Jill Jones, capital 8,000


Business transactions always affect at least two elements in the accounting equation. The accounting equation is: Assets = Liabilities + Equity
After a transaction is recorded, the accounting equation must be in balance. ……

Partnership


Corporation


Owned by shareholders or stockholders. A corporation is a separate legal entity. Owners are not liable for the debts of the corporation.
JJ's Lawn Care Service Balance Sheet May 11, 2001 Assets Liabilities & Owner's Equity Cash $ 3,500 Notes payable $ 13,000 Tools & equipment 2,800 Accounts payable 300 Truck 15,000 Total liabilities $ 13,300 Owner's Equity Jill Jones, capital 8,000 Total $ 21,300 Total $ 21,300
The Effects of Business Transactions
The Effects of Business Transactions
JJ's Lawn Care Service Balance Sheet May 18, 2001 Assets Liabilities & Owner's Equity Cash $ 3,500 Notes payable $ 13,000 Accounts receivable 150 Accounts payable 300 Tools & equipment 2,650 Total liabilities $ 13,300 Truck 15,000 Owner's Equity Jill Jones, capital 8,000 Total $ 21,300 Total $ 21,300
Total
$ 21,000 Total
$ 21,000
The Effects of Business Transactions
On May 11, 2001, JJ’s purchased some repair parts for $300 on account.
The Effects of Business Transactions
Accounting English @2011 3
1.3 Framework for Preparation and presentation of financial statements
IASC – since 1973 IASB – since 2001 There is a growing trend to adopt accounting standards that are in harmony with international accounting standards. ……
The Effects of Business Transactions
On May 18, 2001, JJ’s sold half of their repair parts to ABC Lawns for $150, a price equal to JJ’s cost. JJ’s will receive the cash within 30 days.
Cash
Total
$
8,000 Total
$
8,000
The Effects of Business Transactions
On May 2, 2001, JJ’s purchased a riding lawn mower for $2,500 cash.
The Effects of Business Transactions