Beruflich Dokumente
Kultur Dokumente
1-1
Chapter
Accounting in Action
Financial Accounting, IFRS Edition
Weygandt Kimmel Kieso
Slide
1-2
Study
Study Objectives
Objectives
Slide
1-3
1.
2.
3.
4.
5.
6.
What
What is
is Accounting?
Accounting?
The purpose of accounting:
(1)
to identify,
identify record,
record and communicate the economic
events of an
Slide
1-4
(2)
organization to
(3)
interested users.
What
What is
is Accounting?
Accounting?
Three Activities
Illustration 1-1
The activities of the
accounting process
What
What is
is Accounting?
Accounting?
Who Uses Accounting Data
Internal
Users
Human
Resources
Taxing
Authorities
External
Users
Labor
Unions
Finance
Management
Customers
Creditors
Marketing
Slide
1-6
Regulatory
Agencies
Investors
What
What is
is Accounting?
Accounting?
Common Questions Asked
User
Human Resources
Investors
Management
Finance
Marketing
Creditors
Slide
1-7
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Ethics In Financial Reporting
Standards of conduct by which ones actions are judged
as right or wrong, honest or dishonest, fair or not fair,
are Ethics.
Recent financial scandals include: Enron (USA),
Parmalat (ITA), Satyam Computer Services (IND), AIG
(USA), and others.
Effective financial reporting depends on sound ethical
behavior.
Slide
1-8
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Ethics In Financial Reporting
Slide
1-9
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Review Question
Ethics are the standards of conduct by which one's
actions are judged as:
a. right or wrong.
b. honest or dishonest.
c. fair or not fair.
d. all of these options.
Slide
1-10
Solution on
notes page
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Accounting Standards
International Accounting Standards Board (IASB)
http://www.iasb.org/
International Financial Reporting Standards (IFRS)
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1-11
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Measurement Principles
Cost Principle (Historical) dictates that companies record
assets at their cost.
Issues:
Reported at cost when purchased and also over the time the
asset is held.
Cost easily verified, market value is often subjective.
Fair value information may be more useful.
Slide
1-12
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Measurement Principles
Fair Value Principle indicates that assets and liabilities should
be reported at fair value.
In determining which measurement principle to use, companies
weigh the factual nature of cost figures versus the relevance of
fair value.
Only in situations where assets are actively traded, such as
investment securities, is the fair value principle applied.
Slide
1-13
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Assumptions
Monetary Unit Assumption include in the accounting records
only transaction data that can be expressed in terms of money.
Economic Entity Assumption requires that activities of the
entity be kept separate and distinct from the activities of its
owner and all other economic entities.
Proprietorship.
Partnership.
Forms of Business
Ownership
Corporation.
Slide
1-14
SO 5 Explain the monetary unit assumption and the economic entity assumption.
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Slide
1-15
Proprietorship
Partnership
Corporation
Generally owned
by one person.
Owned by two or
more persons.
Ownership divided
into shares
Often small
service-type
businesses
Owner receives
any profits, suffers
any losses, and is
personally liable for
all debts.
Generally unlimited
personal liability
Separate legal
entity organized
under state
corporation law
Limited liability
Partnership
agreement
SO 5 Explain the monetary unit assumption and the economic entity assumption.
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Review Question
Combining the activities of Kellogg and General Mills
would violate the
a. cost principle.
b. economic entity assumption.
c. monetary unit assumption.
d. ethics principle.
Slide
1-16
Solution on
notes page
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Indicate whether each of the following
statements presented below is true or false.
Slide
1-17
True
False
Solution on
notes page
Career
Career Opportunities
Opportunities
APPENDIX
as an accountant in
any
emphasize
on
accounting fraud
The
The Legal
Legal Form
Form of
of Company
Company
Proprietorship
Slide
1-19
Partnership
Corporation
SO 5 Explain the monetary unit assumption and the economic entity assumption.
The
The Legal
Legal Form
Form of
of Company
Company
Proprietorship
Perusahaan
Perorangan
Generally owned
by one person.
Often small
service-type
businesses
Owner receives
any profits, suffers
any losses, and is
personally liable for
all debts.
Slide
1-20
SO 5 Explain the monetary unit assumption and the economic entity assumption.
The
The Legal
Legal Form
Form of
of Company
Company
Partnership
CV
Owned by two or
more persons.
Often retail and
service-type
businesses
Generally unlimited
personal liability
Partnership
agreement (active
& passive partner)
Slide
1-21
SO 5 Explain the monetary unit assumption and the economic entity assumption.
The
The Legal
Legal Form
Form of
of Company
Company
Corporation
Perseroan
Terbatas
SO 5 Explain the monetary unit assumption and the economic entity assumption.
The
The Building
Building Blocks
Blocks of
of Accounting
Accounting
Review Question
A business organized as a separate legal entity under
state law having ownership divided into shares is a
a. proprietorship.
b. partnership.
c. corporation.
d. sole proprietorship.
Slide
1-23
Solution on
notes page
Kinds
Kinds of
of Company
Company
2 kinds of company :
merchandising company
service company.
Slide
1-24
Merchandising
Merchandising Operations
Operations
Merchandising Companies
Buy and Sell Goods
Wholesaler
Retailer
Consumer
Service
Service company
company
Provide service to their customers, such as auto
repair company, bank, arcihtect, consultant
The primary source of revenues is referred to as
fee or service revenue
Slide
1-26
Operating
Operating Cycle
Cycle of
of Company
Company
Slide
1-27