Conceptual framework

1
 4-3
Accounting Steps
Company/entity Theories and standards

1. Accounting policy 1. Human life and thinking

1
2. Accounting system 2. Accounting theory
3. Accounting application
3. Conceptual framework
2
1. Transaction/event
4. Accounting standards and
pronouncements
2. Source documents
3. Recognition
The auditing
4. Measurement
5. Journal 3 1. Audit standard
6. Posting 2. Audit Process
7. General Ledger 3. Audit Results and Report
8. Adjustment Entries
9. Adjusted trial balance
10.Report Generating + Disclosure

11.Closing entries
DECISION MAKING
12.Ending balance sheet
 4-4

Steps in Accounting Cycle

134

Analyze Journalize Post entries to Prepare a trial

source transactions in the accounts balance.
documents. the journal. in the ledger.

Journalize and Journalize and Prepare Closing

Do post-closing post closing post adjusting financial entries.
trial balance entries entries statements.
 Full Disclosure Principle
All Information Useful for Investment, Credit, and Similar Decisions
Financial Reporting
Affected by Existing FASB Standards Illustration 24-1
Basic Financial Statements

Notes to Other Means of

Financial Supplementary Other
Financial Financial
Statements Information Information
Statements Reporting

Balance sheet Examples Examples: Examples: Examples:

Statement of  Accounting  Changing  Management  Competition
Income Policies Prices Discussion and Order
Statement of  Contingencies Disclosures and Analysis Backlog in SEC
Cash Flows  Oil and Gas  Letters to Forms
 Inventory
Statement of Methods Reserves Stockholders  Analysts'
Changes in Information reports
 Shares
Stockholders’ Outstanding  Economic
Equity Statistics
 Alternative
Measures  Articles
Chapter 24-5