The document provides an introduction to basic accounting concepts including:
1) Accounting is the universal language of business and finance. It tracks assets, liabilities, and owner's equity through journal entries, ledger accounts, and financial statements.
2) The key financial statements are the balance sheet and income statement. The balance sheet provides a snapshot of financial position on a given date, showing assets, liabilities, and owner's equity. The income statement shows revenues and expenses over a period of time.
3) Accounts are classified as assets, liabilities, owner's equity, revenues, or expenses. The accounting equation states that assets always equal liabilities plus owner's equity. Proper record keeping and financial analysis
The document discusses cash flow statements, balance sheets, and income statements. It provides definitions and examples of key terms used in each type of financial statement. Cash flow statements track money in and out of the business. Balance sheets show a company's assets, liabilities, and equity at a point in time. Income statements summarize a company's revenues and expenses over a period of time. Financial statements together provide important information to managers and investors about a company's financial performance and health.
Understanding financial-statements-revised-2012-10-7-12Tanvir Ahmed
The document discusses understanding financial statements for small businesses. It defines financial statements as summarized results of business transactions over a period of time, showing income, expenses, cash balances and debt levels. It then explains how to read and analyze a company's income statement and balance sheet, including reviewing revenue and expense trends, profitability, liquidity, debt and inventory levels. The document stresses the importance of comparing financial statement numbers to budgets, competitors and prior periods for optimal management insights.
Accounting involves recording and analyzing a business's financial activities. There are two main types: financial accounting which analyzes a company's financial position, and managerial accounting which is used for internal decision making. Key financial documents include the balance sheet, which measures financial health at a point in time by listing assets, liabilities, and equity, and the income statement, which reports revenue, expenses, and profit over a period. Accounting helps ensure accountability, enable comparisons, and is a business's common financial language.
This document discusses accounting basics including financial statements, analyzing financial performance, and interpreting key metrics. It introduces the income statement, balance sheet, and how to use ratios to evaluate liquidity, profitability, debt, and returns. Ratios like current ratio, quick ratio, gross profit margin, operating profit margin and more are explained. Vertical and horizontal analysis of financial statements is also covered to identify trends over time or between companies.
The document provides an overview of accounting concepts and financial statements for attorneys. It covers topics such as financial statements and tax returns, financial analysis, advisory functions, and client risks and opportunities that can be identified from statements and returns. The document defines accounting and discusses the accounting equation, balance sheet, income statement, statement of cash flows, and components of personal and business tax returns. It emphasizes how statements and returns can provide both obvious and not-so-obvious insights about clients' financial health, risks, opportunities, and more.
The document discusses accounting concepts including assets, liabilities, owner's equity, and how transactions affect the accounting equation. It defines assets as things of value owned by a business, liabilities as amounts owed, and owner's equity as the owner's claim against assets. Transactions are analyzed by identifying which accounts are affected, whether they are assets, liabilities, or owner's equity, and if each account increases or decreases. Keeping accurate accounting records helps businesses make good decisions.
Vacation rental management budgeting and financial management 401Amy Hinote
Budgeting and managing finances for vacation rental managers: An in-depth four hour boot camp incorporating more hands-on knowledge of how to manage the financial landscape and use budgeting as a foundational tool to grow the business and meet future goals.
The document provides an overview of the accounting cycle and key concepts in financial accounting. It discusses [1] what accounts are and how they are used to record business transactions, [2] the basic steps in the recording process including journalizing, posting to ledgers, and preparing a trial balance, and [3] key adjusting entries related to deferrals like prepaid expenses and unearned revenues, and accruals like accrued revenues and accrued expenses. The purpose is to explain the fundamentals of recording and reporting financial information according to generally accepted accounting principles.
The document discusses cash flow statements, balance sheets, and income statements. It provides definitions and examples of key terms used in each type of financial statement. Cash flow statements track money in and out of the business. Balance sheets show a company's assets, liabilities, and equity at a point in time. Income statements summarize a company's revenues and expenses over a period of time. Financial statements together provide important information to managers and investors about a company's financial performance and health.
Understanding financial-statements-revised-2012-10-7-12Tanvir Ahmed
The document discusses understanding financial statements for small businesses. It defines financial statements as summarized results of business transactions over a period of time, showing income, expenses, cash balances and debt levels. It then explains how to read and analyze a company's income statement and balance sheet, including reviewing revenue and expense trends, profitability, liquidity, debt and inventory levels. The document stresses the importance of comparing financial statement numbers to budgets, competitors and prior periods for optimal management insights.
Accounting involves recording and analyzing a business's financial activities. There are two main types: financial accounting which analyzes a company's financial position, and managerial accounting which is used for internal decision making. Key financial documents include the balance sheet, which measures financial health at a point in time by listing assets, liabilities, and equity, and the income statement, which reports revenue, expenses, and profit over a period. Accounting helps ensure accountability, enable comparisons, and is a business's common financial language.
This document discusses accounting basics including financial statements, analyzing financial performance, and interpreting key metrics. It introduces the income statement, balance sheet, and how to use ratios to evaluate liquidity, profitability, debt, and returns. Ratios like current ratio, quick ratio, gross profit margin, operating profit margin and more are explained. Vertical and horizontal analysis of financial statements is also covered to identify trends over time or between companies.
The document provides an overview of accounting concepts and financial statements for attorneys. It covers topics such as financial statements and tax returns, financial analysis, advisory functions, and client risks and opportunities that can be identified from statements and returns. The document defines accounting and discusses the accounting equation, balance sheet, income statement, statement of cash flows, and components of personal and business tax returns. It emphasizes how statements and returns can provide both obvious and not-so-obvious insights about clients' financial health, risks, opportunities, and more.
The document discusses accounting concepts including assets, liabilities, owner's equity, and how transactions affect the accounting equation. It defines assets as things of value owned by a business, liabilities as amounts owed, and owner's equity as the owner's claim against assets. Transactions are analyzed by identifying which accounts are affected, whether they are assets, liabilities, or owner's equity, and if each account increases or decreases. Keeping accurate accounting records helps businesses make good decisions.
Vacation rental management budgeting and financial management 401Amy Hinote
Budgeting and managing finances for vacation rental managers: An in-depth four hour boot camp incorporating more hands-on knowledge of how to manage the financial landscape and use budgeting as a foundational tool to grow the business and meet future goals.
The document provides an overview of the accounting cycle and key concepts in financial accounting. It discusses [1] what accounts are and how they are used to record business transactions, [2] the basic steps in the recording process including journalizing, posting to ledgers, and preparing a trial balance, and [3] key adjusting entries related to deferrals like prepaid expenses and unearned revenues, and accruals like accrued revenues and accrued expenses. The purpose is to explain the fundamentals of recording and reporting financial information according to generally accepted accounting principles.
This document discusses how to prepare three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It provides examples of the components and format of each statement. The income statement reports revenues, expenses and net income. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet lists assets, liabilities, and equity on a specific date. Preparing these statements helps users make better financial decisions.
This document discusses how to prepare three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It provides examples of the components and format of each statement. The income statement reports revenues, expenses and net income. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet lists assets, liabilities, and equity on a specific date. Preparing these statements helps users make better financial decisions.
The document discusses corporate objectives, finance and accounting concepts, and basic accounting principles. It explains that every organization aims to achieve broad objectives over time through vision and mission statements. It also defines key accounting terms like assets, liabilities, revenues, and expenses; and accounting principles including revenue recognition, historical cost, and matching. The document outlines the recording of transactions, rules of debit and credit, and types of original books like journals and cash books.
Basics of Financial Management for Non Finance Executives - Part 1SChakrabarti
This is an introductory Session of Financial Management for Non Finance executives. it covers the basic Financial concepts and provides an overview of Financial Statements, different types of transactions and the similarities and differences between assets & expenses.
The document provides an overview of a class on financial projections and entrepreneurial studies. It discusses understanding personal financial obligations, preparing basic financial sheets like income statements and balance sheets, accounting terminology, business record keeping requirements, and calculating basic financial ratios. Students are expected to learn how to prepare a personal budget, understand minimum living expenses, grasp basic accounting concepts, and know what financial records are required to be kept and how to maintain them properly.
Here are the answers to the quiz questions:
1. Balance Sheet
2. Income Statement
3. The accounting equation - Assets = Liabilities + Owner's Equity
4. Revenue and Expense accounts
5. Balance Sheet and Statement of Cash Flows
6. Revenue, Expenses, Net Income
7. Balance Sheet
8. Stockholder's Equity or Shareholder's Equity
This document provides an overview of accounting concepts including the five basic account types (assets, liabilities, equity, income and expenses), the accounting equation, and who uses accounting information. Key points include:
- Assets are resources owned that provide future benefits, liabilities are debts owed, and equity is the owners' claim on assets. The accounting equation is Assets = Liabilities + Equity.
- Income increases assets and equity, expenses decrease assets. Common income examples are sales revenue and expenses include supplies and wages.
- Individuals, businesses, investors, creditors, governments and non-profits all use accounting information for purposes like managing finances, evaluating investments, and making decisions.
This document provides an overview of key financial statements:
- The income statement shows revenues, expenses, and net income/loss over a period of time.
- The statement of owner's equity tracks changes in equity value from net income/loss as well as owner investments and distributions.
- The balance sheet lists assets, liabilities, and equity on a given date to show financial position.
- The statements are interrelated, with net income flowing to impact equity on the balance sheet. The document also defines current and noncurrent assets/liabilities and provides examples of each.
This document provides an overview of accounting and financial reporting for businesses in Namibia. It discusses the importance of accounting, key accounting concepts like the accounting equation and double-entry bookkeeping, preparing common financial statements, and tax compliance requirements. Maintaining proper accounting records and financial reporting helps businesses ensure statutory compliance, make informed decisions, and measure performance.
The document provides an overview of accounting concepts including the chart of accounts, balance sheets, income statements, and cash flow statements. It explains that the chart of accounts lists asset, liability, and equity accounts and is used to categorize financial information. It also defines key accounting equations like assets = liabilities + equity and describes how the balance sheet and income statement are organized and used to report financial positioning and performance. The document concludes by discussing cash budgeting and different ratio analyses that can be used for financial assessment and comparison.
The document discusses the needs and purposes of key financial statements including the income statement, balance sheet, and statement of cash flows. It explains the components and calculations of these statements. It also describes common financial ratios used in analysis of statements, such as liquidity, profitability, asset management, and leverage ratios. These ratios are used to evaluate a firm's performance and financial position over time and in comparison to other companies.
This document discusses key financial statements and ratios used to evaluate company performance. It describes the three main financial statements - the balance sheet, income statement, and cash flow statement. The balance sheet provides a snapshot of company assets, liabilities, and equity on a given date. The income statement shows revenues and expenses over a period of time. The cash flow statement reports cash inflows and outflows. Financial ratios are calculated using numbers from the statements to analyze a company's financial health, like the current ratio from the balance sheet and net profit ratio from the income statement.
A Simple Start to Managing Your Business FinancesHostPaul
This document provides a concise introduction to financial management for small businesses. It discusses the importance of financial accounts and reports for understanding business performance, cash flow, and decision making. The document also provides a practice session walking through examples of basic financial tasks like recording sales, expenses, payments received and made. The goal is to help new business owners get started with simple but essential financial management.
“Interpreting Financial Statements” by Philip DrakeMegan Calcote
This document provides an overview and introduction to understanding financial statements. It begins with an agenda that outlines topics to be covered including the accounting equation, financial statement relations, ratio analysis, and cash flow analysis. It then discusses key concepts like the accounting equation that balances assets with liabilities and equity. The three main financial statements are introduced as the balance sheet, income statement, and statement of cash flows. Common components of each statement are defined. The rest of the document discusses how financial statements link business decisions and valuation, and provides examples of analyzing elements like return on equity, working capital management, and cash-to-cash cycles.
This document provides an introduction to basic financial management concepts for small businesses. It covers setting up a chart of accounts to categorize transactions, using common financial reports like income statements and balance sheets to understand business performance, and practicing common financial tasks like recording sales, expenses, and payments. The goal is to help small business owners get started with basic financial record keeping and reporting.
Financial Workshop - Builders Profitable Marketing Oct 2015 Roshan Fernando
Great presentation for Small Business owners to understand the importance of being able to read financial statements, the difference between profit and cash flow, the power of 1 and basic ratios and percentages to keep an eye on operational performance and cash flow...
This document provides a tutorial on preparing three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It explains the purpose and format of each statement. The income statement reports revenues, expenses and net income for a period. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet reports assets, liabilities, and equity as of a point in time. The tutorial also discusses the accounts that make up each statement and the order they should be prepared.
The document provides a tutorial on preparing three key financial statements: the income statement, statement of retained earnings, and balance sheet. It explains the purpose and format of each statement. The income statement reports revenues, expenses and net income over a period of time. The statement of retained earnings shows the changes in retained earnings from the beginning to the end of the period. The balance sheet reports assets, liabilities, and equity of a company at a point in time.
This document provides a tutorial on preparing three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It explains the purpose and format of each statement. The income statement reports revenues, expenses and net income for a period. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet reports assets, liabilities, and equity as of a point in time. The tutorial also discusses the accounts that make up each statement and the order they should be prepared.
This document provides an overview of how to prepare three key financial statements: the income statement, balance sheet, and cash flow statement. It discusses the basic formats and components of each statement. The income statement reports a company's revenues, expenses and net income over a period of time. The balance sheet outlines a company's assets, liabilities and equity at a point in time. It categorizes assets as current and non-current and liabilities as current and long-term. The purpose is to analyze a company's financial position and performance.
Total Quality Management (TQM) is a management approach focused on meeting customer needs and improving processes. The document discusses the history and key thinkers in TQM, including Deming, Juran, Ishikawa, and Crosby. It also covers the Baldrige National Quality Program established in 1987 to recognize excellence through criteria in leadership, strategic planning, customer/market focus, information/analysis, human resources, process management and business results. The Baldrige Award has become a standard for quality excellence pursued by many large corporations.
Q&As on business and collective bargaining.pdfKevin117905
This document contains a series of questions and answers about collective bargaining and business. It discusses why collective bargaining is important for both workers and businesses. It allows issues to be settled through dialogue rather than confrontation, and provides benefits to the enterprise, stakeholders, and society. The document also provides guidance on how companies can uphold collective bargaining rights, such as by recognizing unions, bargaining in good faith, and providing worker representatives with necessary facilities and information. It discusses the importance of negotiation and concluding collective agreements.
This document discusses how to prepare three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It provides examples of the components and format of each statement. The income statement reports revenues, expenses and net income. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet lists assets, liabilities, and equity on a specific date. Preparing these statements helps users make better financial decisions.
This document discusses how to prepare three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It provides examples of the components and format of each statement. The income statement reports revenues, expenses and net income. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet lists assets, liabilities, and equity on a specific date. Preparing these statements helps users make better financial decisions.
The document discusses corporate objectives, finance and accounting concepts, and basic accounting principles. It explains that every organization aims to achieve broad objectives over time through vision and mission statements. It also defines key accounting terms like assets, liabilities, revenues, and expenses; and accounting principles including revenue recognition, historical cost, and matching. The document outlines the recording of transactions, rules of debit and credit, and types of original books like journals and cash books.
Basics of Financial Management for Non Finance Executives - Part 1SChakrabarti
This is an introductory Session of Financial Management for Non Finance executives. it covers the basic Financial concepts and provides an overview of Financial Statements, different types of transactions and the similarities and differences between assets & expenses.
The document provides an overview of a class on financial projections and entrepreneurial studies. It discusses understanding personal financial obligations, preparing basic financial sheets like income statements and balance sheets, accounting terminology, business record keeping requirements, and calculating basic financial ratios. Students are expected to learn how to prepare a personal budget, understand minimum living expenses, grasp basic accounting concepts, and know what financial records are required to be kept and how to maintain them properly.
Here are the answers to the quiz questions:
1. Balance Sheet
2. Income Statement
3. The accounting equation - Assets = Liabilities + Owner's Equity
4. Revenue and Expense accounts
5. Balance Sheet and Statement of Cash Flows
6. Revenue, Expenses, Net Income
7. Balance Sheet
8. Stockholder's Equity or Shareholder's Equity
This document provides an overview of accounting concepts including the five basic account types (assets, liabilities, equity, income and expenses), the accounting equation, and who uses accounting information. Key points include:
- Assets are resources owned that provide future benefits, liabilities are debts owed, and equity is the owners' claim on assets. The accounting equation is Assets = Liabilities + Equity.
- Income increases assets and equity, expenses decrease assets. Common income examples are sales revenue and expenses include supplies and wages.
- Individuals, businesses, investors, creditors, governments and non-profits all use accounting information for purposes like managing finances, evaluating investments, and making decisions.
This document provides an overview of key financial statements:
- The income statement shows revenues, expenses, and net income/loss over a period of time.
- The statement of owner's equity tracks changes in equity value from net income/loss as well as owner investments and distributions.
- The balance sheet lists assets, liabilities, and equity on a given date to show financial position.
- The statements are interrelated, with net income flowing to impact equity on the balance sheet. The document also defines current and noncurrent assets/liabilities and provides examples of each.
This document provides an overview of accounting and financial reporting for businesses in Namibia. It discusses the importance of accounting, key accounting concepts like the accounting equation and double-entry bookkeeping, preparing common financial statements, and tax compliance requirements. Maintaining proper accounting records and financial reporting helps businesses ensure statutory compliance, make informed decisions, and measure performance.
The document provides an overview of accounting concepts including the chart of accounts, balance sheets, income statements, and cash flow statements. It explains that the chart of accounts lists asset, liability, and equity accounts and is used to categorize financial information. It also defines key accounting equations like assets = liabilities + equity and describes how the balance sheet and income statement are organized and used to report financial positioning and performance. The document concludes by discussing cash budgeting and different ratio analyses that can be used for financial assessment and comparison.
The document discusses the needs and purposes of key financial statements including the income statement, balance sheet, and statement of cash flows. It explains the components and calculations of these statements. It also describes common financial ratios used in analysis of statements, such as liquidity, profitability, asset management, and leverage ratios. These ratios are used to evaluate a firm's performance and financial position over time and in comparison to other companies.
This document discusses key financial statements and ratios used to evaluate company performance. It describes the three main financial statements - the balance sheet, income statement, and cash flow statement. The balance sheet provides a snapshot of company assets, liabilities, and equity on a given date. The income statement shows revenues and expenses over a period of time. The cash flow statement reports cash inflows and outflows. Financial ratios are calculated using numbers from the statements to analyze a company's financial health, like the current ratio from the balance sheet and net profit ratio from the income statement.
A Simple Start to Managing Your Business FinancesHostPaul
This document provides a concise introduction to financial management for small businesses. It discusses the importance of financial accounts and reports for understanding business performance, cash flow, and decision making. The document also provides a practice session walking through examples of basic financial tasks like recording sales, expenses, payments received and made. The goal is to help new business owners get started with simple but essential financial management.
“Interpreting Financial Statements” by Philip DrakeMegan Calcote
This document provides an overview and introduction to understanding financial statements. It begins with an agenda that outlines topics to be covered including the accounting equation, financial statement relations, ratio analysis, and cash flow analysis. It then discusses key concepts like the accounting equation that balances assets with liabilities and equity. The three main financial statements are introduced as the balance sheet, income statement, and statement of cash flows. Common components of each statement are defined. The rest of the document discusses how financial statements link business decisions and valuation, and provides examples of analyzing elements like return on equity, working capital management, and cash-to-cash cycles.
This document provides an introduction to basic financial management concepts for small businesses. It covers setting up a chart of accounts to categorize transactions, using common financial reports like income statements and balance sheets to understand business performance, and practicing common financial tasks like recording sales, expenses, and payments. The goal is to help small business owners get started with basic financial record keeping and reporting.
Financial Workshop - Builders Profitable Marketing Oct 2015 Roshan Fernando
Great presentation for Small Business owners to understand the importance of being able to read financial statements, the difference between profit and cash flow, the power of 1 and basic ratios and percentages to keep an eye on operational performance and cash flow...
This document provides a tutorial on preparing three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It explains the purpose and format of each statement. The income statement reports revenues, expenses and net income for a period. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet reports assets, liabilities, and equity as of a point in time. The tutorial also discusses the accounts that make up each statement and the order they should be prepared.
The document provides a tutorial on preparing three key financial statements: the income statement, statement of retained earnings, and balance sheet. It explains the purpose and format of each statement. The income statement reports revenues, expenses and net income over a period of time. The statement of retained earnings shows the changes in retained earnings from the beginning to the end of the period. The balance sheet reports assets, liabilities, and equity of a company at a point in time.
This document provides a tutorial on preparing three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It explains the purpose and format of each statement. The income statement reports revenues, expenses and net income for a period. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet reports assets, liabilities, and equity as of a point in time. The tutorial also discusses the accounts that make up each statement and the order they should be prepared.
This document provides an overview of how to prepare three key financial statements: the income statement, balance sheet, and cash flow statement. It discusses the basic formats and components of each statement. The income statement reports a company's revenues, expenses and net income over a period of time. The balance sheet outlines a company's assets, liabilities and equity at a point in time. It categorizes assets as current and non-current and liabilities as current and long-term. The purpose is to analyze a company's financial position and performance.
Total Quality Management (TQM) is a management approach focused on meeting customer needs and improving processes. The document discusses the history and key thinkers in TQM, including Deming, Juran, Ishikawa, and Crosby. It also covers the Baldrige National Quality Program established in 1987 to recognize excellence through criteria in leadership, strategic planning, customer/market focus, information/analysis, human resources, process management and business results. The Baldrige Award has become a standard for quality excellence pursued by many large corporations.
Q&As on business and collective bargaining.pdfKevin117905
This document contains a series of questions and answers about collective bargaining and business. It discusses why collective bargaining is important for both workers and businesses. It allows issues to be settled through dialogue rather than confrontation, and provides benefits to the enterprise, stakeholders, and society. The document also provides guidance on how companies can uphold collective bargaining rights, such as by recognizing unions, bargaining in good faith, and providing worker representatives with necessary facilities and information. It discusses the importance of negotiation and concluding collective agreements.
The document provides a template recognition and procedural agreement between a trade union (Unite) and an employer. The template covers key areas such as objectives of the agreement, scope of recognition, union representation and facilities, joint consultation and negotiation procedures, and grievance resolution processes. It aims to help Unite representatives negotiate formal recognition from employers and establish effective processes for representation, collective bargaining, and dispute avoidance and resolution.
1. Identify potential risks using techniques like a risk breakdown structure, brainstorming, or reviewing historical data. Key risk categories include technical, schedule, budget, and regulatory compliance.
2. Analyze the probability and impact of identified risks using a risk matrix. Prioritize risks based on their probability and potential impact.
3. Develop risk responses such as contingency plans, risk mitigation actions, and risk monitoring procedures. Assign roles for risk monitoring and response implementation.
4. Create a risk register/log to track identified risks, analysis results, assigned roles, and ongoing status. Meet regularly to
This document discusses the key concepts of labour law. It outlines the objectives of labour legislations as establishing social, political and economic justice; protecting weaker workers; maintaining industrial peace; and ensuring human rights. The principles of labour legislations are described as social justice, equity and security. Social justice means equitable distribution of profits between owners and workers, while protecting worker health and safety. Social equality provides flexibility to adjust to industrial needs. Social security involves collective action against social risks. The scope of labour law covers industrial relations, health and safety standards, employment standards, and workplace issues like wages, hours and dismissal procedures.
This chapter outlines the key aspects of product design and development. It discusses the characteristics of successful products, who is involved in the development process, and the typical duration and costs. It also covers some of the main challenges and how structured development methods and organizational realities can impact projects. The chapter concludes by introducing some of the major steps in a typical product development process.
This document discusses the time value of money concepts of interest, present value, and future value. It provides examples of calculating simple and compound interest, as well as the present and future value of single deposits and annuities. Formulas for simple and compound interest, present value, future value, ordinary annuities, and annuities due are presented along with examples of applying the concepts and formulas to story problems. Tables of interest rate factors are also included to allow for lookup of present and future values.
The document discusses key financial statements used for corporate reporting:
1) The balance sheet provides a snapshot of a firm's assets, liabilities, and equity on a given date. It shows what the firm owns and how it is financed.
2) The income statement measures financial performance over a period by calculating revenues earned and expenses incurred. It determines net income.
3) The statement of cash flows explains changes in a firm's cash balance by outlining cash flows from operating, investing, and financing activities. It is important because net income does not always reflect actual cash flow.
The accounting equation forms the basis of financial accounting and requires that assets always equal liabilities plus owners' equity. Transactions are analyzed to determine their impact on this equation. The balance sheet presents the accounting equation at a point in time, showing assets, liabilities, and owners' equity. The income statement and statement of owners' equity analyze changes over a period of time, with revenues and expenses impacting owners' equity on the income statement and investments and withdrawals impacting it on the statement of owners' equity.
This PowerPoint presentation discusses managing growth in small businesses. It covers the entrepreneur's leadership role, the distinctive features of small business management, the managerial tasks of entrepreneurs, and solutions to time pressure issues like using outside management assistance. The presentation addresses topics such as creating an organizational structure, controlling operations, planning, delegating, and communicating. It provides examples of leadership styles, factors that determine organizational span of control, and types of outside assistance available.
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
Taurus Zodiac Sign: Unveiling the Traits, Dates, and Horoscope Insights of th...my Pandit
Dive into the steadfast world of the Taurus Zodiac Sign. Discover the grounded, stable, and logical nature of Taurus individuals, and explore their key personality traits, important dates, and horoscope insights. Learn how the determination and patience of the Taurus sign make them the rock-steady achievers and anchors of the zodiac.
Navigating the world of forex trading can be challenging, especially for beginners. To help you make an informed decision, we have comprehensively compared the best forex brokers in India for 2024. This article, reviewed by Top Forex Brokers Review, will cover featured award winners, the best forex brokers, featured offers, the best copy trading platforms, the best forex brokers for beginners, the best MetaTrader brokers, and recently updated reviews. We will focus on FP Markets, Black Bull, EightCap, IC Markets, and Octa.
Part 2 Deep Dive: Navigating the 2024 Slowdownjeffkluth1
Introduction
The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
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Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
The 10 Most Influential Leaders Guiding Corporate Evolution, 2024.pdfthesiliconleaders
In the recent edition, The 10 Most Influential Leaders Guiding Corporate Evolution, 2024, The Silicon Leaders magazine gladly features Dejan Štancer, President of the Global Chamber of Business Leaders (GCBL), along with other leaders.
Storytelling is an incredibly valuable tool to share data and information. To get the most impact from stories there are a number of key ingredients. These are based on science and human nature. Using these elements in a story you can deliver information impactfully, ensure action and drive change.
Discover timeless style with the 2022 Vintage Roman Numerals Men's Ring. Crafted from premium stainless steel, this 6mm wide ring embodies elegance and durability. Perfect as a gift, it seamlessly blends classic Roman numeral detailing with modern sophistication, making it an ideal accessory for any occasion.
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LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
We will dig deeper into:
1. How to capture video testimonials that convert from your audience 🎥
2. How to leverage your testimonials to boost your sales 💲
3. How you can capture more CRM data to understand your audience better through video testimonials. 📊
B2B payments are rapidly changing. Find out the 5 key questions you need to be asking yourself to be sure you are mastering B2B payments today. Learn more at www.BlueSnap.com.
At Techbox Square, in Singapore, we're not just creative web designers and developers, we're the driving force behind your brand identity. Contact us today.
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
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accountingbasics.ppt
1. Basics of Accounting
(The Language of Finance)
Devotional
Introduction Video
Discussion of Fundamentals
Basic Accounting Problem
Grade on Neatness – Bring Back Problem on
Wednesday
Note: Use a Pencil & Take Good Notes
2. Business & Accounting
Accounting is the universal language of Business and
Finance.
More CEO’s from fortune 500 companies have come up
through the ranks of accounting than from any other area
in business. Currently: 54%
Small businesses and usually fail because of poor
accounting understanding.
Marriages usually fail because of poor financial
management (80% of divorces are $$$$ related.)
If you want to get ahead in business & marriage
determine that you are going to understand accounting
basics.
4. Terms
Assets: Tangible and Non-tangible resources
of a business that have future value. Usually
sub-classified as follows:
Quick Assets (Liquid Assets)
Cash – Petty Cash – Receivables - Securities
Current Assets (Turn into cash/use annually)
All the above + Inventories, Supplies
Fixed Assets (Depreciated over several yrs.)
Buildings, Equipment, Natural Resources
Land (Fixed, but never depreciated)
Intangible Assets: Patents, Trademarks, Copyrights
5. What are your Assets?
Bank Account & Money in your pocket
Car
Clothes
Books
Stocks/Bonds/CD’s
Prepaid rent
Computers & Electronic Equip.
Knowledge????
Abilities????
6. Accounting Term: Liabilities
Other people’s claims against your assets!
What you owe!! Debts!
Classified as:
Current Liabilities (one year debt)
Credit Card Debt, Accounts Payable
Long Term Liabilities
Car, Mortgage, Note Payable
Unearned revenues
Bonds (usually super long term)
7. What are your liabilities?
School Loan
Car Loan
Credit Card Balance
J.C. Penny Account
BYU-Idaho Amount Due
8. Capital or Owners Equity
The portion of your assets that you can legally claim.
(Net Assets) What you really own legally.
Assets – (minus) Liabilities = Owners Equity (or Capital)
Example (purchased a building for $500,000 with a 10%
down payment ($50,000)
Cost of a building (sales price = Asset amount) $500,000
Less: What you still owe on the building (Liability) $450,000
Equals: Your equity in the building (Capital) or your net worth in
the building. $50,000
Formula universally used in all financial and personal
financial institutions:
Assets = Liability + Owners Equity (Balance Sheet
Equation)
(Resources you have) =(What you owe on them) + (the principle
you have paid on them.)
9. Owners Equity Account Titles
Single Proprietorship:
Capital
Corporation:
Common Stock (what owners paid in)
Preferred Stock (what owners paid in)
Retained Earnings (profits that the business
keeps in the business)
10. What is your net worth???
What you have minus what you owe.
What format do we use in business and in
personal finance to show our net worth?
A Balance Sheet Financial Statement
List of Assets (classified by type in accounts)
Compared or balanced with:
List of Liabilities and Owners Equity (classified by type
and in accounts)
Text Book Example Page 660
11. Example (Simplified)
John Doe’s Business or Personal Records
Balance Sheet
September 10, 2003
Assets:
Current:
Cash at Home $100
Cash Deposits in Bank 500
Fixed:
Wardrobe 2000
Equipment 1000
Car 5000
Total Assets: $8,600
Liabilities:
Current:
Credit Card Payable $500
Long Term:
Note Payable (on Car) $2000
Total Liabilities $2,500
Capital, John Doe: 6,100
Total Liabilities & Owners Equity: $8,600
12. Other Terms
Temporary Accounts are used in addition to
balance sheet accounts to record changes in
owners equity each reporting period.
Expenses – Decrease in owners equity during the
period by using up an asset or a portion of an asset.
(or creating additional liabilities)
Revenue – Increase in owners equity during the
period by performing a service or selling an asset.
Drawing or Dividends – Decrease in owners equity
due to personal withdrawals by the owner(s).
13. Income Statement Report
Used to determine the net income or net
loss of an individual or business for a
defined period of time.
Used for marking progress by comparing
months and years
Used by financial institutions for determining
the progress and status of a company or
individuals financial health.
Used by the IRS for determining taxes
14. Income Statement – What does it
contain?
Matches Expenses with Revenues for a specific
period of time. (Only the temporary type of
accounts are on the income statement.) No
Assets/Liabilities
Income Statement accounts are closed out at
the end of the reporting period and started over
again the next period….so comparisons can be
made.
Personal Income Statement sometimes called a
Cash Flow Statement example on page 661
15. Income Statement – Example
Name of Individual or business
Income Statement
For period of time (Month of Sept. 2003)
Revenue:
Income from Job $500
Income from Pell Grant 2000
Total Revenue: $2500
Expenses:
Clothes Expense $300
Rent Expense 200
Food Expense 50
Tuition Expense 1200
Misc. Expense 250
Total Expenses: $2000
Net Income for September: $ 500
16. Pop Quiz – Use a Pencil Today
1. Which financial report is a “snapshot” of the of the
financial status of a business or a family…..and is given
a specific date?
2. Which financial report is a “moving picture” of the
business/enterprise for a period of time?
3. What does a balance sheet balance?
4. What are the two kinds of accounts found on an
Income Statement?
5. On what financial report(s) is the “cash” account
found?
6. What are the three subtitles of a income statement.
(name them in the order they are given on the report)
7. If the bank wanted to know your “Net Worth” what
report would they ask for?
8. Capital in a corporation is entitled ?
9. Two ways to increase the capital account are?
10. Two ways to decrease the capital account are?
17. How do individuals or businesses keep track for all
their assets, liabilities, capital, expenses,
revenues. Etc.?
The “Accounting Process” or otherwise
known as the Accounting Cycle. (also
called the “Audit Trail” of business.
Based on universally accepted accounting
principles. (Generally accepted
accounting principles)
Double Entry Bookkeeping
Accrual Accounting vs. Cash Accounting
Bookkeeping part of accounting.
18. Accounting Cycle – Start with
financial transactions (you will
need to know these steps!)
Verbs & Nouns for each step
#1 Analyze Source Documents
Check, receipts, invoices, deposit slips, etc.
Decide what accounts they represent
#2 Enter (journalize) data in the journal.
Chronological record of transactions
Book of original entry – checks and balances
Two or more accounts entered at cost
Make a Journal – Required
19. Accounting Cycle
#3 Post from the journal to the individual
ledger accounts. (to keep a running balance of
each account)
Ledger divided up into these different accounts:
Assets (100 accounts)
Liabilities (200 accounts)
Capital/Owners Equity (300 accounts)
Revenues (400 accounts)
Cost of Goods Sold (Expense) – (500 accounts)
General Expenses (600 accounts)
Make some ledger accounts - required
20. Accounting Cycle #4
Adjust the necessary accounts to bring
them up to date.
Requires internal transactions
Requires journal entries & posting as well
Example: Maybe some of your Supplies
valued at $500 when you bought them have
been used…you need to bring their value up
to date and expense what has been used.
Example: Depreciation of Equipment
21. Accounting Cycle #5
#5 At the end of the period or at any time
(with computers) balance all of the
accounts in a trial balance. (Checks and
balance step to see if all of your journal
entries and posting was correct.)
The trail balance is a list of all of your
accounts with balances.
The total of the debit balances must equal the
total of the credit balances.
Make a Trial Balance - Required
22. Accounting Cycle #6 & 7 & 8
#6 Prepare the Financial Statements
Income Statement
Statement of Changes in Owners Equity
Balance Sheet
Make Financial Statements - Required
#7 Close out all the temporary accounts to
zero, so that you can start a new period/cycle.
Requires journal entries and postings
#8. Analyze your financial findings.
23. The Balance Sheet and Debits and Credits
Balance Sheet Equation
A = L + OE
Use of another checks & balance method
Debits and Credits are terms used to increase or
decrease various accounts and show balances.
All Accounts have either a debit or credit balance.
Assets/Expenses/Withdrawals have debit balances
Increased by debiting and decreased by crediting
Liabilities, Capital, and Revenues have credit
balances.
Increased by crediting, and decreased by debiting
24. Assets = Liabilities + O.E.
Cash A/P Capital
Debit Credit Debit Credit Debit Credit
+ - - + + -
100 50 100
75
-Drawing -Expense +Revenue
Dr Cr Dr Cr Dr Cr
+ - + - - +
50 75
Each Transaction in finance has a debit and a credit. The debit amount must
always equal the credit amount. (Checks & Balances)
Example: Invested 100 Cash in my business.
Example: Paid $50 for Advertising Expense.
Example: Earned $75 for performing services
At the end of the day: (Assets = 125) = (Liabilities = 0) + (OE = 125) and
debits = 225 and credits = 225 (Double balance, double witness)
25. Quiz Preview – Review with Partner
1-2. Give the accounting equation and define each element in the equation.
_____________________________ = _________________________ + ______________________
Define:_________________________ _______________________ ______________________
3. Accounting is called the _____________________________________ of business.
4-7. Name these two statements (The Trial Balance is not a Statement) used in accounting which are used
by managers to make financial decisions (the ones completed in your accounting project) What type of
accounts are on each statement?
First Statement Prepared_____________________________________________________________
Types of accounts found on this statement._______________________________________________
Last Statement Prepared___________________________________________________________
Two accounts found on this statement?__________________________________________________
8-12. Give the verbs and nouns of the Six first steps in the accounting cycle: (fill in the blanks)
Verb Noun
1.) _________________________________ _________________________________
2.) _________________________________ _________________________________
3.) _________________________________ _________________________________
4.) ____Adjust _______________________ ____Internal Accounts_______________
5.) _________________________________ _________________________________
6.) _________________________________ _________________________________
26. Accounting Quiz - Continued
13. If the accountant wanted to know the balance of cash currently owned by the
business he would go to the:
______________________________________________________
14. If the accountant wanted to know what type of transaction happened on a specific day
he would go to the:
______________________________________________________
15. The report that determines the net profit or loss of a business for a specific period of
time is called the:
______________________________________________________
Credit Debit Matching
16. ______Increase to Assets when recorded in the journal are: A. Debit(s)
17._______Increase to Liabilities when recorded in the journal are: B. Credit(s)
18. _______Increase to Expenses when recorded in the journal are: C. Can be either Dr or Cr.
19._______Asset accounts carry what kind of balances: D. Always both Dr & Cr
20._______Revenue accounts carry what kind of balance:
27. Quiz – Last Page
21. What does ROI stand for in finance/accounting? _____________
__________ ______________________
22. What is the “Separate Entity
Principle”_______________________________________________________
23. Net Income is added to what account in the “Statement of Owners
Equity”__________________________
24. In what two ways can you decrease the Capital Account?
_________________ _____________________
On the Back
25-26. Draw/format the ledger account for cash (only) with a beginning balance
of $2000 and post the following two transactions in the account that occurred
today. (You do not need to make any journal entries.)
A. Received $5000 into the business from a personal investment from the
owner of the business.
B. Paid out $1000 to employees in wages.
27-30. Format the April Income Statement for “Ace” company that has these
accounts: (You may not need to use all of the accounts): Cash: $100, A/P
$50, Service Revenue: $500, Sales Revenue: $1000, Cost of Goods Sold
Expense: $400, Advertising Expense: $100, Misc. Expense: $300,
Wages Expense $200, A/R: $300.
28. The best way to learn:
Complete a simplified practice set that
covers the entire accounting cycle.
Work in partnership with another student
and the teacher. Use a pencil!
Final product: Do your own set of
personalized financial statements.
Problem due on Friday 1/16/04. Quiz over
the accounting language and Accounting
Cycle on Friday.
29. Separate Entity Principle
(Keep your business records separate
from you personal records)
Lets start a home cleaning business.
First Transaction on 1/1
Pull $1,000 savings out of your personal
account and put it into your business account.
Assets = Liabilities + Owners Equity
Cash = 0 Capital
1,000 1,000
30. Record in Daily Journal
Date Entries PR DR CR Pg1
1/1 Cash 101 $1000
Capital 301 $1000
Started business with personal investment.
31. Posting to the Ledger Accounts:
Post $1000 as a debit to the cash account
Post $1000 as a credit to the capital
account
Cash 101
Date Explanation PR DR CR BAL
1/1 J1 $1000 $1000
Capital 301
1/1 J1 $1000 $1000
32. 2nd Transaction
Acquire a Loan of $5,000 to buy
equipment and materials to start a
cleaning business.
Assets = Liabilities + OE
Cash Loan Payable Capital
$6,000 $5,000 $1,000
($1,000 + $5,000)
$6000 = $6000
36. Journal Entry
Date PR Dr Cr___
1/3 Equipment 120 $3000
Cash 101 $3000
Used cash to purchase equipment
37. Posting to the Ledger Accounts
Cash 101
Date PR Dr Cr Bal___
1/1 J1 1000 1000
1/2 J1 5000 6000
1/3 J1 3000 3000
Equipment 120
Date PR Dr Cr Bal__
1/3 J1 3000 3000
38. Pop Quiz – Are you ready?
1. Give the accounting equation and define each element.
2. What is the separate-entity principle?
3. Give the first three steps in the accounting cycle using verbs and nouns.
4. When a family or a business does something to change their financial
picture or position it is called what?
5. What are the two financial statements discussed in class and what type
of accounts are on each.
6. When we increase an asset what do we say in terms of debits and
credits? How about a liability?
7. What are the temporary accounts used in financial management?
8. What kind of a balance do the following accounts carry:?
Assets Expenses Revenues Liabilities Capital Drawing
9. Format a balance sheet and income statement.
10. What do the following terms mean? ROI, Liquidity, Profit, Goodwill
42. 5th Transaction 1/5
Had my first cleaning job for $400. Was
paid $100 down with the rest due at the
end of the month.
43. Journal Entry
Date PR Dr Cr
1/5 Cash 101 100
A/R 110 300
Revenue 401 400
Performed services and received
down payment. Bal due: 1/31
44. Postings
Cash 101
Date PR Dr Cr Bal___
1/1 J1 1000 1000
1/2 J1 5000 6000
1/3 J1 3000 3000
1/4 J2 200 2800
1/5 J2 100 2900
Accounts Receivable 110
Date PR Dr Cr Bal___
1/5 J2 300 300
Service Revenue 401
Date PR Dr Cr Bal___
1/5 J2 400 400
45. Transaction #6 #7#8#9&10
Hired my little brother to help me and paid
him $100 in wages
Worked all day on second cleaning job
and was paid $500
Had to spend $300 on cleaning supplies to
be used during the next two months.
Took $200 out of my business to take my
wife on a mini moon.
Allocated 50% use of my truck to my
business. Book price of truck = $6000
48. Posting Cont.
Service Revenue 401
Date PR Dr Cr Bal___
1/5 J2 400 400
1/7 J2 500 900
Cleaning Supplies 130
Date PR Dr Cr Bal_____
1/8 J2 300 300
Anderson, Drawing 320
Date PR Dr Cr Bal______
1/9 J2 200 200
49. Posting Cont.
Truck 150
Date PR Dr Cr Bal_____
1/10 J2 3000 3000
Capital 301
1/1 J1 $1000 $1000
1/10 J2 $3000 $4000
50. Adjustments at the end of the
month – Internal Transactions –
Step #4 in the Accounting Cycle
Adjusted the cleaning supplies to show
that 33% had been used up.
Adjusted the truck account to show that
one month had been used up.
Truck was expected to last for two more years
$3000/24months = $125 use per month
51. Journal Entries – Adjustments
Date PR Dr Cr__
1/31 Adjustments
Cleaning Supplies Expense 621 100
Cleaning Supplies 130 100
Inventory showed that only $200 in supplies remained
at the end of the month.
1/31 Adjustment
Depreciation Expense/Trk 650 125
Truck (Accum Dpr.) 151 125
52. Postings of Adjustment Entries
Cleaning Supplies Expense 621
Date PR Dr Cr Bal
1/31 Adjustment J2 100 100
Cleaning Supplies 130
Date PR Dr Cr Bal_____
1/8 J2 300 300
1/31 Adjustment J2 100 200
Depreciation Expense – Truck 650
Date PR Dr Cr Bal
1/31 Adjustment J2 125 125
Truck 150
Date PR Dr Cr Bal_____
1/10 J2 3000 3000
1/31 Adjustment 125 2875
54. Step #6 – Prepare Financial Statements
Anderson Cleaning Services
Income Statement
Month of January 2004
Revenue:
Service Revenue: $900
Expenses:
Advertising Expense: $200
Wages Expense: 100
Cleaning Supplies Expense: 100
Depreciation Expense: 125
Total Expenses: 525
Net Income (Loss) $375
Return on Cash Investment $375/1000 = 37.5%
Return on Total Investment $375/4000 = 9.4%
What is our Income Statement Missing???????
55. Statement of Owners Equity
Anderson’s Cleaning Business
Statement of Owners Equity
For May 2005
Beginning Capital 5/1/05: $1000
Add: New Investments (truck) 3000
Net Income (from Income Statement) 375
Less: Drawing (mini-moon) (200)
Net Loss na
Ending Capital 5/31/05: $4175
56. Balance Sheet
Anderson Cleaning
Balance Sheet
January 31, 2204
Assets:
Cash $2,800
Accounts Receivable 300
Cleaning Supplies 200
Equipment 3000
Truck 3000
Less Accum. Depr. 125 2875
Total Assets: $9,175
________
Liabilities
Loan Payable $5,000
Owner’s Equity
Anderson, Capital 4,175
Total Liabilities & O.E: $9,175
______
57. Sample Quiz Questions
Terms: Assets, Liabilities, Owners Equity,
Capital, Debits, Credits, Accounting
Equation, Ledger, Accounting Cycle,
Posting, Financial Statements, ROI
Seven Steps in the Accounting Cycle?
Verbs & Nouns???
Format an Income Statement/Balance
Sheet? (Given the accounts)
Record and post and business transaction
58. 8 Steps Reviewed
Verb Noun
1. Analyze Source Documents
2. Enter (Journalize) Journal
3. Post Ledger
4. Adjust Internal Entries
5. Balance Trial Balance
6. Prepare Financial Statements
7. Close Temporary Accounts
8. Analyze Data
59. Debits & Credits
Used for checks and balances in Acct.
Must always be equal
Every Transaction has equal debits/credits
Debits increase Assets/Expenses/Drawing
Credit increase Liabilities/Capital/Revenue
Debits decrease Liabilities/Cap/Rev
Credits decrease Assets/Exp/Drawing
60. Owners Equity
Two ways to increase this account:
1) New investments in the business
Cash Investments
Equipment Investments
2) Revenues earned in the business
Two ways to decrease this account:
1) Expenses (Using assets up to generate a
profit or incurring new liabilities)
2) Taking money out of the business for
personal use.
61. Debits and Credits
Terms used to increase or decrease an
account and keep everything in balance.
Assets = Liabilities + O.E.
Increases Increases Increases
(Debits) (Credits) (Credits)
Decreases Decreases Decreases
(Credits) (Debits) (Debits)
62. Steps in the Accounting Cycle
1. Analyze the transaction source documents
and decide what accounts are involved. What
account needs to be increased and what
account needs to be decreased…..what
account(s) needs to be debited and what
account(s) need to be credited.
Examples of Source Documents:
Deposit Slips, Invoices, Sales Slips, Contracts,
memos, packing slips, electronic memos, etc.
Source documents are usually kept on file (three
years) as backup for tax and company audits.
63. Step #2 - Enter source document
data in a chronological journal.
(Data Entry on the Computer)
The Journal is called the book of original entry,
and is on the computer in most companies.
It gives the date of the transaction.
It gives a record of the accounts debited and credited
in the transaction. (the accounts increased or
decreased)
It gives the post reference number of the ledger
accounts involved. (after the transaction has been
posted to the ledger accounts)
64. Step #3 – Post (transfer)
transaction data from the journal to
the individual ledger accounts.
The “Ledger Accounts” are individual records of
all the assets, liabilities, and owners equity
accounts.
Each Ledger Account is updated daily and
keeps a ongoing record of activity in the account
and balance of the account.
All data that goes into the ledger accounts must
first be put into the journal and then posted from
the journal to the ledger account on the day the
information is journalized.
65. Step #4 – Adjustments
Adjustments are the internal transactions of a
company that a good accountant will make to set
in order each account. They must be journalized
first and then posted to the ledger.
Adjustments are usually made at the end of an
accounting period.
Examples: Depreciation, Use of pre-paid rent
or insurance, interest earned or expensed, use
of supplies and materials, unearned revenues
earned during the period.
66. Step #5 – Trial Balance
Before preparing your statements, make
sure that all of your accounts have the
correct balance.
List of all accounts with debit and credit
balances……DEBITS MUST EQUAL
CREDITS.
If not in balance you must go back in your
audit trail and find your errors.
67. #6 Prepare your Financial
Statement – Income Statement,
Statement of OE, & Balance Sheet
This is the main product of the accounting
system that outsiders/investors/creditors
etc. will look at to see the financial health
of your business.
These statements and how to read them
and create profitability ratios from their
numbers should become second nature to
a business owner, or anyone interested in
finance. This knowledge is essential.
68. #7 – Close all the temporary
accounts and start over.
Close the temporary accounts:
All Expense Accounts
All Revenue Accounts
All Drawing or Dividend accounts.
Transfer the net increases or decreases of these
temporary accounts into the permanent owners
equity account of capital or retained earnings.
This makes it possible for the company to start a
new set of reports to compare with the old etc.
69. #8 Analyze Data
A list of the accounts you start the new
accounting period with.
A check to see if Debits = Credits with
these continuing accounts.
If total DEBITS DO NOT EQUAL total
CREDITS a mistake has been made and
needs correction.
70. Final Quiz
1. Define:
Asset:
Liability:
Capital:
Expense:
Revenue:
2. Write out the proper accounting
equation: (formula)
71. Final Quiz:
3. What is the first accounting book called
that is used to record transactions
chronologically?
4. For any and all transactions Debits
must always equal _______________?
5. If I wanted to know what balance I had
in cash what record/book would I turn to?
6. Cash carries what kind of a balance?
72. Quiz:
7. The use of a fixed asset over a period
of time is called what?
8. What is ROI and what two figures in
accounting do you use to determine it?
9. The accounting cycle is also known as
the _______________ _____________?
73. Quiz – Last Question
10. Using the following accounts, format in titles
only the Income Statement and the Balance
Sheet. (List titles and total lines were
appropriate.)
Cash,
Accounts Payable,
Accounts Receivable,
Equipment,
Advertising Expense,
Depreciation Expense,
Service Revenue,
Capital
74. Monday’s Assignment
1. Using the “Balance Sheet Format,” prepare your own
personalized or family Balance Sheet Report listing at least seven
accounts. (Make it neat (with heading) and type it up)
2. Using the “income statement format,” complete a cash flow
personalized income statement showing all the revenue (money)
you received in January, and the expenses (money) you spent. The
bottom line would be your net profit or net loss for January. Show at
least seven items in this report. Examples of Revenue: (money
from parents) (money from pell grant) (money from savings)
(money earned from work) (money borrowed from roommates)
(money received from loans) etc. Examples of expenses: (money
paid for tuition) (money paid for books) (food) (entertainment)
(utilities) (phone) etc.
Both Reports need to have headings and both need to be in the
format for balance sheet and income statement that we have
learned in class. Both Need to be typed.
75. Monday
Turn in your neat & complete accounting
problem with three statements.
Be prepared for a quiz on the basics of
accounting.
Know the 8 steps of the accounting cycle.
Know the financial report formats for the income
statement and balance sheet….and the format of a
ledger account. Also debits & credits.
Turn in your personal balance sheets and
income statements for January.