2. Accounting is a system for recording
information about business
transactions to provide summary
statements of a company's financial
position and performance to users
who require such information.
6. • Assets
– Resources owned by a business that are
expected to provide future economic
benefits
• Liabilities
– Claims on assets by “creditors” (non-
owners) that represent an obligation to make
future payment of cash, goods, or services
• Stockholders’ Equity (Owners’ equity)
– Claims on assets by owners of business
• Contributed Capital
• Retained Earnings
7. • Revenues
– Increases in “owners’ equity” from
providing goods or services
• Expenses
– Decreases in “owners’ equity” incurred
in the process of generating revenues
• Net Income (or Earnings or Net Profit)
= Revenues – Expenses
8.
9. Indicate responsibilities
Management responsible for financial
statements,
Auditor responsible to express an opinion
Scope
Auditor Followed GAAP
opinion
Financial Statement in Accordance with
GAAP.
