第一章 & 第二章 1)會計(Accounting) 會計是一套記錄個人、企業或組織的財務活動的資訊系統，包括收集分類、綜合、分析和解 釋成本資料，並提供財務預算、核數、年結、帳目及成本等分析報告，可協助個人、企業或 組織確認、記錄及了解其經濟狀況。 Accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users. a. The first part of the process, identifying, involves identifying those events that are considered evidence of economic activity relevant to a particular business organization. b. Recording is the keeping of a chronological diary
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and qualitative characteristics of financial reporting information, and the elements of financial statements. LO1–8 Describe the four basic assumptions underlying GAAP. LO1–9 Describe the recognition, measurement and disclosure concepts that guide accounting practice. LO1–10 Contrast a revenue/expense approach and an asset/liability approach to accounting standard setting. LO1–11 Discuss the primary differences
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accounting, cash is recognized when the physical cash transaction occurs. Thus, this method does not recognize payables, receivables, and prepaid expenses. Additionally, cash basis accounting does not comply with the revenue recognition principle and the matching principle. In accrual basis of accounting, revenue is recognized when it is earned and expenses are recognized when they are incurred. Susan Ward states, “Accrual basis accounting gives the most accurate picture of the financial state of
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earnings, January 1, 2008 $ 48,000 Advertising expense $ 1,800 Dividends during 2008 6,000 Rent expense 10,400 Service revenue 62,500 Utilities expense 3,100 Salaries expense 30,000 Linda Stanley Co. Income Statement For the Year Ended December 31, 2008 Revenues Service revenue $ 62,500 Expenses Rent expense $ 10,400 Salaries expense 30,000 Utilities expense 3,100
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Sources of Generally Accepted Accounting Principles A set of standards developed and universally practiced are called Generally Accepted Accounting Principles (GAAP). Generally accepted means that an authoritative accounting rule-making body, has accepted as appropriate due to their universal application. Otherwise each company would have created their own standards. There are some organizations that are very important in the development of GAAP, such as the Securities and Exchange Commission (SEC)
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enterprise. Basic Functions of an Accounting System Interpret and record business transactions. Classify similar transactions into useful reports. Summarize and communicate information to decision makers. Information System Cost & Revenue Determination Job costing Process costing ABC Sales Assets & Liabilities Plant and equipment Loans & equity Receivables, payables & cash Cash Flows From operations From financing From investing Information Users Investors Creditors
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Codification topics are intended to reduce the amount of standards, and standard setters, with the guidance of the Securities and Exchange Commission. The nine content areas located in the system include Presentation, Assets, Liabilities, Equity, Revenue, Expenses, Broad Transactions, and Industry. Presentations offers guidance on income statement preparation, notes to financial statements, and for calculating earnings per share. The Assets section contains information on accounting for receivables, investments
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with single search at one place. The nine content areas and the items under them in the codification system The nine content areas located in the FASB Codification system are General Principles, Presentation, Assets, Liabilities, Equity, Revenue, Expenses, Broad Transactions and Industry. The General Principles are used to recognize the accounting principles and framework sources and use them to select the principles that will be used in preparing the nongovernmental entities financial statements
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has conducted the audit. GPC’s total revenue for 2011 is $80 million. In examining the revenue for the year, you notice that $3 million of the revenue does not come from GPC’s primary operations (i.e., revenue from sales of paper goods). This $3 million in revenue is labeled as timber revenue in GPC’s books. This strikes you as odd because, generally, GPC buys timber. That is, timber is part of the cost of goods sold for GPC and, as such, is an expense. You ask GPC’s controller, Pat Smith
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” states Accounting Coach. The matching principle requires that companies use the accrual basis for accounting. That is, expenses are matched to revenues as they occur. An example would be: commissions are accounted for in the week that the sale was made, not the week the commission was paid. The revenue recognition principle works the same way. Sales and expenses are accounted for when the
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