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1、一 What we should do in class,English:learn how to express in English Accounting:familiar with accounting terms,concepts one more time.Combine both freely but English is more important.,二 Improve English by.,Read textbook in class and after class Remember new words Answer questions in exercise is imp
2、ortant Overlook some parts while emphasizing some other parts.,三 Introduction of textbook,Structure:have 2 sections:financial accounting:first part management accounting:later partIn each lesson:have lesson,reading materials and exercises.,Lesson 1 An introduction of accounting,一 Whats accounting?二
3、Accounting functions.三 Modern accounting.,一 Whats accounting?,An information system presents financial position and operating results(income or loss)to interested users.What do you think?,二 Functions,1 Reporting financial information to outside interested users Outside users are:investors,banks and
4、other creditors,government agencies,general publics Financial accounting:provides external reports o outsiders,financial information.,Reporting management information to internal users Internal users are senior management-level personnel.Management accounting(next page),Management accounting:use bot
5、h historical data in assisting management daily operations and in planning future operations.the process of generating and analyzing accounting data,such as budget,performance report cost-benefit data.Provide management inside with internal decision-making information.,三 Modern accounting,A number o
6、f specialized fields of accounting involve：1 Financial accounting 2 Management accounting 3 Auditing:a field of activity involving an independent review of the accounting records.,4 Tax accounting:preparation of tax returns and the consideration of the tax consequences of proposed business transacti
7、ons or alternatives of action.编制纳税申报表并考虑经济业务的税收后果及行为选择,5 Accounting system:design and implementation of procedures for the accumulation and reporting of financial data设计并实行程序来汇总和报告财务数据,6 Budgetary accounting：prepare plan of financial operation for a future period,through records and summaries and co
8、mpare the predetermined plan.A combination of planning and controlling,it is considered to be part of management accounting.,7 International accounting:concerned with the special problems associated with the international business:Multinational enterprises transactions.Consolidated financial reports
9、,Foreign currency transactions.,8 Not-for-profit accounting:accounting for governmental units and other not-for-profit unit like churches,charities and educational institutions.,.,9 Social accounting:measurement of social costs and benefits which have previously been considered to be immeasurable.,四
10、 whats GAAP?,Generally accepted accounting principles公认会计原则Contains:Accounting Standards,Principles,Procedures,Conventions.,五 The most important assumptions,Accounting entityGoing concernMeasuring unitHistorical costObjectiveMatching revenue and expConsistencyMaterialityConservatismComparabilityAcco
11、unting period,1 Accounting entity,accounting entity:each business entity must separate from others(persons who supply its assets and other businesses),only record business as a separate one,accounting concepts here are suitable to the enterprise.Accounting information is understandable,2 Going conce
12、rn,2 going concern:it is assume that once a business open,people will have a reasonable expectation of continuing in business for a quite long time(indefinitely),3 Measuring unit(3-1),3 Measuring unit(unit of measurement):All business tractions are recorded in terms of money.Only through money,that
13、diverse transactions and activities of a business may be measured.Reported,and periodically compared.Money is both the common factor of an business transactions and only feasible unit of measurement that can be used to achieve uniform financial data.,Measuring unit(3-2),Assume money unit is unchange
14、able and stable,so you neednt adjust you figures of you report constantly.,4 Historical cost,historical cost:all most all items or accounts record and report at acquisition price or original price.So adjust book value when price go upward is forbidden,but downward is allowed in some cases.,5 Objecti
15、ve(5-1),accounting entry reported on financial statements must be based on objective source document or evidence.,Objective(reliability)(5-2),Evidence is not always conclusively objective,for there are many cases in accounting in which judgments,estimates,and other subjective factors must be taken i
16、nto account in such cases,the most subjective evidence available should be used,6 Matching principle,the revenue recognized during the period match(配比）the expired costs allocated in the period,the residual being the net income or net loss for the period.,7 Consistency:一贯性,Different method,principle
17、have different effects on income statement and balance sheet.A entity should apply same procedures and principles used in preceding years.Chances are permissible when it is believed that use a different principle will more fairly state net income and financial position.Example:Change in the method o
18、f inventory pricing&Depreciation method,8 Materiality,Accountants must consider the relative importance of any eventsFor important events,should be disclosed materially,minor events may be disclosed simple or combined.,9 Conservatism（9-1）,Conservatism:Historically,accountants often favored the metho
19、d or the procedure that yield the less or amount of net income or of asset value.It is often expressed as a statement”anticipate no profits and provide for all losses”Example:it is acceptable to price merchandise inventory at lower of cost or market.,Conservatism（9-2）:,But now it is not a dominant p
20、rinciple in selecting alternatives.It may be considered only when other factors affecting a choice of alternatives are neutral,10 Comparability,1Accounting information must be comparable from business to business,2 Each businesss financial statements must be comparable from one period to the next3 E
21、nsure investors compare business to business4 Standardization of formats for financial statements promotes comparability,六 Standard-makers in U.S.,FASB:Financial Accounting Standards Board 财务会计委员会Built in 1973,a non-organized unitThe former body is APB,which disappeared for its inefficiency.,Exercis
22、es 1:,1 Equipment that as required for$250,000 has a current book value of$100,000 and an estimated value of$120,000.If the replacement cost of the equipment is$350,000,at what amount should the equipment be reported in the balance sheet?A$120,000 C$350,000B$150,000 D$None of the aboveAnswer:D,Exerc
23、ises 2:,Identify the accounting principle,if any,that is violated the situation.Choose among disclosure,conservatism,cost,accounting entity.matchingA manufacturer records depreciation during years when net income is high but fails to record depreciation when net income is low.Revenues are relatively
24、 constant.(disclosure,conservatism,matching),The inventory of a firm has a current market value of$163,000.The store reports the inventory at its cost of$181,000.(disclosure,conservatism),Exercises 3,Indicate which concept is applied:1.Although company could increase its reported income by changing
25、depreciation method,The management has decided not to make the change.(comparability),2 ABC company make such small payments for fire insurance that expense them and make one-year-end adjustment for prepaid insurance.(revenue)3 Because of a downturn in the company.A jeweler increase his business all
26、owance for doubtful accounts.(comparability),A manufacturing companys plant assets are carried on the books at cost under the assumption that the company will remain operation for the foreseeable future.(cost,going concern),Exercises 4:,The organization that formulate GAAP presently isA AICPA C FASB
27、B IRS D Institute of management Accountants Answer:(C),Lesson 2 Assets in balance sheet,一 Three basic financial statements1 Balance sheet(B/S)2 Income statement(I/S)3 Cash flow statement(CF/S),Balance sheet(B/S),A listing of assets,liabilities,owners equity on a given date.Mainly imparts financial p
28、osition(status)information.such as total value of the business;,Income statement(I/S),a summary of revenue,expense,net income,Cash flow statement(CF/S),a summary of cash flows in and out,report net cash flow.,The personal residence of the owner of a freight company is not disclosed in the financial
29、statement of the business.(accounting entity),二when do we report these statements?,*时间间隔the interval of time*B/s&I/S report annually,quarterly and monthly.CF/S often annually reported.The time is formulated by standards.Different type businesses have different regulations.Listed companies.,三 Whats B
30、alance sheet?,1 Definition:2 Normally the structure is like:T account and have three sections.3 Accounting equation Assets=liabilities+owners equity Description:assets are financed by liabilities and owners equity.,四 What are assets&equities?,1)Assets:Economic resources of business that can be expre
31、ssed in monetary terms and bring future benefits.2)Equities:the rights or claims to assets.,Classification of assets,1)Current assets:cash,short-term investment,A/R,N/R,prepaid exp，supplies on hand,marketable securities.(listed in liquidity order)2)long-term assets:a)fixed assets:land,building,equip
32、ment,machinery,store fixture,office equipment b)intangible assets:patents,franchise(special rights given to firm),What is Depreciation 折旧,depreciable assets 应折旧资产 undepreciable 不需折旧的 depreciation cost 折旧成本 book value 帐面价值 accumulated depreciation.累计折旧(its a contra account to its main account)the acc
33、umulated portion of cost taken 已提折旧,Original cost（historical cost）-Accumulated depreciation.Book value,五 Some words,Liquidity:assets be sold and then used to cover the liabilities2 Prepaid expense:expense has been paid by cash but hasnt incurred(发生），is used as prepaid insurance,prepaid rent exp.,pre
34、paid subscription exp.3 Accrued expense:some expense have incurred but not yet be paid,is used as accrued salaries,4 Transactions:The occurrence of an event or of a condition that must be record.,六 Accounting activities,Private accounting:manufacturing accounting,accounting serve to private sectors
35、like Enterprises.Public accounting:accountant serve as an independent reviewer to check financial reports in order to transform infor.To investors and so on.Governmental accounting:working for government,Exercises 1:making journals,1 Jim invests$50,000 of his money to begin the business.He deposits$
36、50,000 in a bank account entitled Jim.2 Jim purchases land for a future office location,paying cash of$40,0003 Buy office supplies,agreeing to pay$500 within 30 days,Exercises 2:,A business has assets of$140,000 and liabilities of$60,000.How much is its owners equity?A$0 B$80,000 C$140,000 D$20,000,
37、4 Earn service revenue in cash by providing accounting5 Performs service for a client who doesnt pay immediately(A/R),Exercises 3:,On August 1 of the current year C.W.Collins established a sole proprietorship under the name Collins Realty.Collins completed the following transactions during the month
38、:Requirement:record the following transactions.,a.Open a business bank account with a deposit of$5,000.b.Paid rent on office and equipment for the month,$1,200c.Purchased supplies(stationery,stamp,pencils,ink,etc.)on account,$340.d.Paid creditor on account,$250 支付欠债权人的欠款 250e.Earned sales commission
39、s,receiving cash,$4,850f.Withdraw cash for personal use,$1,000g.Paid automobile expenses(including rental charge)for month,$280,and miscellaneous expenses,$175h.Paid salaries,$600i.Determined that he cost of supplies used was$65.,Answer:,(a)Cash 5,000/C.W.Collins,Capital 5,000(b)Rent expense1200/Cas
40、h 1,200(c)Supplies 340/Accounts Payable(A/P)340(d)A/P 250/Cash 250(e)Cash 4,850/Sales 4,850(f)Withdrawals 1,000/Cash 1,000,(g)Automobile expenses 280 Miscellaneous expenses175/Cash 455(h)Office salaries 600/Cash 600Office Supplies Expense 65 Office supplies on hand 65,Lesson 3 liabilities and owners
41、 equity,一 What is liabilities?1 Definition:are the obligations or debts the firm must pay in future.2 How to list them in a balance sheet?According to convertibility,Most liquid at the topof the balance sheet,then gradually decreased mobility.,二 Classification of liabilities,1 Current Liabilities:1
42、year pay or 1 year due obligation or 1 operating cycle2 Long-term Liabilities:beyond 1 year Example:bonds payable,long-term accounts payable,mortgages,三 Current Liabilities includes:,1 Accounts payable(A/P),notes payable(N/P)salaries payable,wages accrued,dividends payable,estimated or accrued payab
43、le,payroll tax payable,sales tax payable(exercise tax payable,income tax payable)2 portion of long-term debt due within one year 一年到期的长期负债,3 unearned revenue 递延收益 An amounts or money has received,but not yet earned as a revenue(that is,not record as a revenue in account and statement)(and companied
44、with decrease of CL or CA),四 How to measure Liabilities,Because they are paid in very short time,fair value is suitable(or present value),and described in B/S(viewed as the money amount of debts)Example:present value for future obligation amount 折现值 历史成本现值,五Owners equity,Definition A net claim to as
45、sets/net assets,六sole proprietorship(独资企业）,partnership（合伙企业）,and corporation（公司制企业）,Difference among them:In sole proprietorship(P/P):capital and Retained earnings are not separately report in B/SIn corporation(Corp.):capital stock and retained earnings are separately display.,七 Some words,capital&s
46、tock:stock just one form of capital,i.e.capital financed in stocknet income&retained earnings:the former refer to 1 year,the later refer to an accumulated net income left in business.,八 Withdrawals(n)withdraw(vt),1 Feature:it is an owners equity account.Another name is drawing.2 Accounting treatment
47、sproprietorship-withdraw informally decrease of owners equity Withdrawal xxx Cash(or other assets)xxx GH,capital xxx Withdrawal xxx,partnership-according to promise among partnerships.Corp.formally dividend Declaration date:Retained earnings XXX Dividend payable XXX Recording date:no entry Payment d
48、ate:Dividend payable XXX Cash XXX,Exercise:how to compute capital?,A proprietorship PPP show the balance sheet as follows:Total assets Total liabilitiesBeginning of the year$275,000$80,000End of the year 320,000 85,000If the owner had made an additional investment of$50,000,but had made no withdrawa
49、ls.Determine the net income(or loss)for the year.,Computation:,Statement of owners equityBeginning balance$195,000+investment of the year 50,000+net income?-withdrawals 0Ending balance of the capital$235,000Answer:net loss=10,Lesson 4 Income statement,一 Whats income statement?Operating results of a
50、period.,二 Items in income statement(I/S)?,operating items Sales/net sales/revenue Cost of goods sold Gross profit:intermediate profit Operating expense Net profit:final profit Interest income和 interest exp的位置 Extraordinary item 的位置,Other income and expense:Interest income/Interest expense 相当于“其他业务收入
