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Chapter 1 – Understanding       Accounting
Objectives of Chapter 1• Be able to describe the nature of business and  the role accounting plays in it.• Be able to disc...
Key Words for Chapter 1•   Accounting•   Business•   Corporation•   Profit•   Financial Accounting Standards Board(FASB)• ...
Accounting Concepts• Business Entity Concept – activities of  business is recorded separately than that of  the owners and...
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Chapter 1 – understanding accounting

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Chapter 1 – understanding accounting

  1. 1. Chapter 1 – Understanding Accounting
  2. 2. Objectives of Chapter 1• Be able to describe the nature of business and the role accounting plays in it.• Be able to discuss the development of accounting principles and accounting concepts.• State the accounting equation and define the elements.• Explain how the accounting equation and business transactions are related.
  3. 3. Key Words for Chapter 1• Accounting• Business• Corporation• Profit• Financial Accounting Standards Board(FASB)• Generally Accepted Accounting Principles(GAAP)• Accounting Equation• Assets• Liabilities• Stockholders’ Equity• Dividends• Revenue Accounts
  4. 4. Accounting Concepts• Business Entity Concept – activities of business is recorded separately than that of the owners and creditors.• Cost Concept –record purchases such as buildings at cost or purchase price.• Objectivity Concept – amounts of purchases are recorded in the accounting records based on objective evidence.

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