Financial Accounting (5th) Weygandt, Kieso, Kimmel

nullFinancial Accounting 财务会计Financial Accounting 财务会计March 2010Lecturer Lecturer 夏明会 CPA China CPA Australia AssessmentAssessmentTextbookTextbookFinancial Accounting (5th): Weygandt, Kieso, Kimmel This is US-base textbook Question Question ReferencesReferences任何一本中文的 财务会计 国际会计准则委员会: www.iasb.org.uk 中国注册会计师协会: www.cicpa.org.cn PWC: www.pwcglobal.com ACCA: www.accaglobal.com AICPA: www.aicpa.orgChapter 1Chapter 1ACCOUNTING MATTERSStudy ObjectivesStudy ObjectivesWhat accounting is Uses and users of accounting Ethics as a fundamental business concept GAAP Monetary unit & economic entity assumptions The accounting equation How business transactions affect the accounting equation Basic financial statementsWHAT IS ACCOUNTINGWHAT IS ACCOUNTINGAccounting is an information system that Identifies （确认）, records（ 记录 混凝土 养护记录下载土方回填监理旁站记录免费下载集备记录下载集备记录下载集备记录下载 ）, and communicates （沟通）the economic events (transactions 业务) of an organization to interested usersnullIdentification Select economic events (transactions)Recording Record, classify and summarize 记录、分类 总结 初级经济法重点总结下载党员个人总结TXt高中句型全总结.doc高中句型全总结.doc理论力学知识点总结pdf Prepare accounting reportsAnalyze and interpret for usersCommunication THE ACCOUNTING PROCESSAccounting...Accounting...is called the language of businessWhy do we need accounting informationWhy do we need accounting informationMaking decisions !The bigger the decision, the greater the need. USERS OF ACCOUNTINGUSERS OF ACCOUNTINGInternal Users 内部使用者 Marketing managers Production supervisors Finance directors Company officersQUESTIONS ASKED BY INTERNAL USERSQUESTIONS ASKED BY INTERNAL USERSIs cash sufficient to pay bills Can we afford to give employee pay raises this year What is the cost of manufacturing each unit of product Which product line is the most profitableUSERS OF ACCOUNTINGUSERS OF ACCOUNTINGExternal Users 外部使用者 Investors 投资者 Creditors 债权人 Tax Department 税务当局 Customers Labor unionsQUESTIONS ASKED BY EXTERNAL USERSQUESTIONS ASKED BY EXTERNAL USERSIs the company earning satisfactory income? How does the company compare in size and profitability with its competitors Will the company be able to pay its debts as they come due到期?Accounting and bookkeepingAccounting and bookkeepingBookkeeping 记账 Involves only the recording of economic events Is just one part of accountingField of Accounting 会计领域Field of Accounting 会计领域Accounting can be divided into two fields. Financial accounting (财务会计): provides information for people outside the company, such as investors and creditors Managerial accounting (管理会计) : focuses on information for internal decision makers, such as mangers of the companynullFinancial AccountingFinancial AccountingAs financial accounting information relates to publicRegulating accounting! 会计 规范 编程规范下载gsp规范下载钢格栅规范下载警徽规范下载建设厅规范下载 All professions have been regulated. Governing organizations in USGoverning organizations in USIn US, the following organizations relate to the regulation of accounting. FASB(财务准则委员会): formulates accounting standards SEC(美国证监会): regulate security markets AICPA(美国注册会计师协会): regulate Certified Public Accountants 注册会计师 IMA: regulate Certified Management Accountants 注册管理会计师.nullwww.fasb.org www.sec.gov www.aicpa.org www.ima.org nullPublic Sector (SEC)Private Sector (FASB)Private Sector (AICPA) (IMA)GAAPThe rules that govern public accounting information are called Generally Accepted Accounting Principles 公认的会计原则Reliable informationReliable informationInvestors and creditors need relevant and reliable information about a company. But is the accounting information of the company reliable? Reliable informationReliable informationThere are so many ways to keep accounting information reliable. SEC requires firms to have their financial statements audited 审计 by independent accountants. Accounting information must be prepared under the standards and the principlesstandards and the principlesstandards and the principlesThese standards and the principles are viewed as the building blocks of accounting THE BUILDING BLOCKS OF ACCOUNTING 会计的基石THE BUILDING BLOCKS OF ACCOUNTING 会计的基石ETHICS 道德: A set of standards by which one’s actions are deemed right or wrong, honest or dishonest. Most individuals in business are ethical. Their actions are both legal and responsible.ETHICS 道德ETHICS 道德Steps for solving an ethical dilemma Recognize an ethical situation and the issues involved Identify the principal elements of the situation Identify alternatives: weigh the impact on stakeholders 利益相关者Ethic caseEthic caseAfter three interviews, Warren Filler, a senior at Great Northern College, received two office interview invitations from the Baltimore offices of two large firms Both firms offered to cover his out-of-pocket expenses. He scheduled the interview for both firms on the same day, one in morning and one in the afternoon. At the each interview, he submitted to both firms his total out-of-pocket expenses $254. He got it from the two firms.Ethic caseEthic caseWho are the stakeholders in this situation? What are the ethical issues in case ? What would you do in this situation?Ethic caseEthic caseWarren Filler, Baltimore Firms, Great Northern College. Is it proper that Warren charged both the firms for the total travel costs rather than splits the actual amount of $254 between the two firms? Is collecting $508 ethical behavior? Did Warren deceive both firms or neither firm?ETHICS 道德ETHICS 道德Ethics in accounting are so important! Most corporations also set standards of ethical conduct for employees. Truth is always better than dishonesty in accounting, in business, and in lifeTHE BUILDING BLOCKS OF ACCOUNTINGTHE BUILDING BLOCKS OF ACCOUNTINGWhat is GAAP 一般公认的会计原则: A set of standards generally accepted and universally practiced by accountants Indicates how economic events are reported Generated by the Financial Accounting Standards Board (FASB 财务准则委员会) and Securities & Exchange Commission (SEC证监会) in US Different nations would have different GAAP, example, Chinese GAAPTHE BUILDING BLOCKS OF ACCOUNTINGTHE BUILDING BLOCKS OF ACCOUNTINGAccounting principles Cost Principle 成本原则: assets should be recorded at their cost Accounting assumptions Monetary unit assumption 货币单位假设 Accounting entity 会计主体假设ACCOUNTING ASSUMPTIONSACCOUNTING ASSUMPTIONSMONETARY UNIT ASSUMPTION: Only transaction data that can be expressed in terms of money is included in the accounting records. The unit of measure (the dollar in the USA) is assumed to remain constant in value MONETARY UNIT ASSUMPTIONMONETARY UNIT ASSUMPTIONThe dollar’s purchasing power购买力 is relatively stable. This allows us to add and subtract dollar amounts as each dollar has the same purchasing power as any other dollar at any time ACCOUNTING ASSUMPTIONSACCOUNTING ASSUMPTIONSECONOMIC ENTITY ASSUMPTION An economic entity includes any organization or unit in society All activities of an entity are kept separate from the activities of its owners and other economic entitiesECONOMIC ENTITY ASSUMPTIONECONOMIC ENTITY ASSUMPTIONEntity decides boundary边界 of accounting Example: Jeff obtained $5000 from the bank loan to start Amazon.com. Following the entity concept, Jeff would account for the $5000 separately from his personal assetsnullJeffAmazon.comnullTypes of Business OrganizationsTypes of Business OrganizationsProprietorships 独资企业Partnerships 合伙企业Corporations 公司ProprietorshipProprietorshipHas a single owner, who is often the manager. Small retail stores From accounting viewpoint, each proprietorship is distinct from its proprietor From legal perspective, the business is the proprietor.ProprietorshipProprietorshipWhat are some advantages total undivided authority no restrictions on type of business – must be legal What are some disadvantages unlimited liability 无限责任 limitation on size: fund raising powerPartnershipPartnershipJoins two or more individual as co-owners. Each owner is a partner合伙人. Professional organizations such legal firm Generally small or medium-sized Accounting treats partnership as a separate organization, distinct from partners. From a legal point, a partnership is the partners.PartnershipPartnershipWhat are some advantages better credit standing – possibly more brain power, but consultation with partners required What are some disadvantages unlimited personal liability for general partners need for written partnership agreementCorporationCorporationowned by stockholders or shareholders股东. A business becomes a corporation when the state approves its articles of incorporation 公司章程. A corporation is a legal entity that conducts business in its own nameCorporationsCorporationsWhat are some advantages separate legal existence limited liability of stockholders 有限责任 transferability of ownership relatively easy What are some disadvantages Taxes: possible double taxation extensive governmental regulationnullTHE BASIC ACCOUNTING EQUATIONTHE BASIC ACCOUNTING EQUATIONAssets 资产Liabilities 负债Equity 权益 =+resources owned by a businessClaims against those assetsowners’ residual claim on total assetsnullAssets Liabilities + EquitiesnullLiabilities ?Investment (Equity)?assetsassetsAssets are resources owned by a business They are things of value used in carrying out such activities as production, consumption and exchange The common characteristics possessed by all assets is the capacity to provide future services or benefits to the entities that use themassetsassetsSome assets are tangible 有形的: computer, cash. Some assets are intangible 无形的: trademark 商标, patents 专利.nullIs reputation an asset?Liability Liability Liabilities are claims against assets They are existing debts 债务and obligations义务 Most claims of creditors attach to total enterprise assets rather than to the specific assets provided by the creditor.THE BASIC ACCOUNTING EQUATIONTHE BASIC ACCOUNTING EQUATIONAs of December 31, 2005, Tick Company has assets of $3,500 and stockholders’ equity of $2,000. What are the liabilities for Tick Company as of December 31, 2005? Answer: $1,500 Assets – Liabilities = Equity $3,500 = Liabilities + $2,000 Liabilities = $1,500 STOCKHOLDERS’ EQUITYSTOCKHOLDERS’ EQUITYStockholders’ equity 股东权益 is equal to total assets minus total liabilities It is also referred to as residual equity 剩余权益 There are two general categories of stockholders’ equity: Paid-in capital 投入资本 Retained earnings 留存收益PAID-IN CAPITALPAID-IN CAPITALPaid in Capital represents the total amount invested by stockholders in a corporation Stockholders invest cash or other assets in exchange for common or preferred stock.RETAINED EARNINGSRETAINED EARNINGSRetained earnings represents cumulative profits (or losses) retained in the business over time Three items make up the balance in retained earnings: REVENUES 收入 EXPENSES 费用 DIVIDENDS 股息REVENUESREVENUESRevenues are the gross increases in stockholders’ equity from engaging in business activities entered into for the purpose of earning income Revenues result from sales of merchandise, performance of services, rental of property, or lending of money Revenues usually result in an increase in an assetEXPENSESEXPENSESExpenses开支消费 are the decreases in stockholders’ equity that result from operating the business They are the cost of assets consumed消耗 or services used in the process of earning revenue Examples are: utility expense公用事业费用, rent expense, supplies expense, tax expense, insurance expense, depreciation expenseDIVIDENDSDIVIDENDSWhen a company is successful, it generates Net Income 净利润 Dividends: the distribution of cash or other assets to stockholders that are available as a result of Net Income Dividends are NOT considered an expense of the corporation.nullDividend is not expense nullINCREASES & DECREASES IN STOCKHOLDERS’ EQUITY Investments by stockholdersRevenuesStockholders’ EquityDividends to stockholdersExpensesIncreasesDecreasesREVIEW QUESTIONREVIEW QUESTIONRebecca Sherrick, Inc., had a stockholders’ equity balance of $164,000 at the beginning of the period. At the end of the period, the stockholders’ equity balance was $198,000. Assuming no additional investment or distributions During the period, what is the net income for the period?nullTRANSACTION ANALYSISTRANSACTION ANALYSISTransactions 业务 are the economic events of the enterprise They may be identified as external or internal External transactions 外部业务involve economic events between the company and some outside enterprise or party Internal transactions 内部业务are economic events that occur entirely within one companyHOW BUSINESS TRANSACTIONS AFFECT THE ACCOUNTING EQUATIONHOW BUSINESS TRANSACTIONS AFFECT THE ACCOUNTING EQUATIONEvery transaction 业务 must have a dual effect on the accounting equation. If an asset is increased, there must be a corresponding: Decrease in another asset, or Increase in a liability, or Increase in stockholders’ equityTRANSACTION IDENTIFICATION PROCESSTRANSACTION IDENTIFICATION PROCESSEventsPurchase computerAnswer phonePay rentRecord Do not record Record CriterionIs the financial position (assets, liabilities, and stockholders’ equity) of the company changedTRANSACTION 1TRANSACTION 1Ray and Barbara Neal decide to open a computer programming company to be incorporated as Softbyte, Inc They invest $15,000 cash in exchange for $15,000 of common stock普通股.null(1) +15,000 = +15,000 Investment There is an increase in the asset Cash, $15,000, and an equal increase in the stockholders’ equity, Common Stock, $15,000.TRANSACTION 2TRANSACTION 2Softbyte purchases computer equipment for $7,000 cashnull (2) -7,000 +$7,000 Cash is decreased $7,000 and the asset Equipment is increased $7,000.=Stock+$7,000=Assets=Liabilities+Stockholders’CommonCash+EquipmentOld Bal.$15,000$15,000New Bal.$ 8,000$15,000$15,000EquityTRANSACTION 3TRANSACTION 3Softbyte purchases computer paper and other supplies expected to last several months from Acme Supply Company for $1,600 Acme Supply Company agrees to allow Softbyte to pay this bill in October, a month later This transaction is often referred to as a purchase on account or a credit purchase信用采购null(3) +$1,600 +$1,600 The asset Supplies is increased $1,600 and the liability Accounts Payable is increased by the same amount.+=+$16,600Assets=Liabilities+EquityAccountsCommonCash+Supplies+Equipment=Payable+StockOld Bal.$8,000$7,000$15,000New Bal.$8,000$1,600+$7,000$1,600$15,000$16,600Stockholders’TRANSACTION 4TRANSACTION 4Softbyte receives $1,200 cash from customers for programming services it has provided This transaction represents the principal revenue-producing activity of Softbytenull(4) +1,200 +1,200 revenue Cash is increased $1,200 and Retained Earnings is increased $1,200.Assets=Liabilities+Stockholders’ EquityAccountsCommonCash+Supplies+Equipment=Payable+StockOld Bal.$8,000$1,600$7,000$1,600$15,000New Bal.$9,200+$1,600+$7,000=$1,600+$15,000$17,800$17,800RetainedEarnings$1,200TRANSACTION 5TRANSACTION 5Softbyte receives a bill for $250 from the Daily News for advertising the opening of its business but postpones payment of the bill until a later date. null(5) +250 -250 expense Accounts Payable is increased $250, and Retained Earnings is decreased $250.Assets=Liabilities+AccountsCash+Supplies+Equipment=Payable+Old Bal.$9,200$1,600$7,000$1,600$15,000New Bal.$9,200+$1,600+$7,000=$1,850+$15,000$17,800$17,800Stockholders’ EquityCommonStockRetainedEarnings$ 950$1,200TRANSACTION 6TRANSACTION 6Softbyte provides programming services of $3,500 for customers Cash amounting to $1,500 is received from customers, and the balance of $2,000 is billed to customers on accountnull(6) +1,500 +2,000 +3,500 revenue Cash is increased $1,500; Accounts Receivable应收账款 is increased $2,000; and Retained Earnings is increased $3,500.Stockholders’ EquityAssets=Liabilities+$21,300$21,300TRANSACTION 7TRANSACTION 7Expenses paid in cash for September are store rent, $600, salaries of employees, $900, and utilities, $200.null(7) -1,700 -600 Rent -900 Salaries -200 UtilitiesCash is decreased $1,700 and Retained Earnings is decreased by $1,700.$19,600$19,600TRANSACTION 8TRANSACTION 8Softbyte pays its Daily News advertising bill of $250 in cash.null(8) -250 -250Cash is decreased $250 and Accounts Payable is decreased by $250.$19,350$19,350TRANSACTION 9TRANSACTION 9The sum of $600 in cash is received from customers who have previously been billed for services in Transaction 6null(9) +600 -600Cash is increased $600 and Accounts Receivable is decreased by the same amount.$19,350$19,350TRANSACTION 10TRANSACTION 10The corporation pays a dividend of $1,300 in cash to Ray and Barbara Neal, the stockholders of Softbyte, Inc.null(10) -1,300 -1,300 Dividends Cash is decreased $1,300 and Stockholders’ Equity is decreased by the same amount.$18,050$18,050BASIC FINANCIAL STATEMENTSBASIC FINANCIAL STATEMENTSAfter all transactions for the period are recorded, financial data is summarized, and that summary data is used to generate the basic financial statements 财务报 表 关于同志近三年现实表现材料材料类招标技术评分表图表与交易pdf视力表打印pdf用图表说话 pdf Income Statement 利润表 Statement of Stockholders’ Equity 权益表 Balance Sheet 资产负债表 Statement of Cash Flows 现金流量表Financial StatementsFinancial StatementsIncome statement (收益表,statement of earnings , statement of operations) : summary of an entity’s revenues and expenses for specific period of time.特别的期间 Net income = revenues – expensesFinancial StatementsFinancial StatementsBalance sheet(资产负债表): list all the entity’s assets, liabilities and equity as of a specific date某一天. Statement of owner’s equity(权益表): shows the changes in owner’s equity during a specific time periodFinancial StatementsFinancial StatementsStatement of cash flows(现金流量表): reports the cash coming in and cash going