Ammad Awan Glasgow says account manager’s are successful if they are good at networking, and building and sustaining relationships. Their business and potential to make money depends on how well they manage in those areas.
The document provides an overview of basic financial accounting concepts. It explains that accounting is based on the accounting equation of Assets = Liabilities + Owners' Equity. The balance sheet expresses this equation by listing assets, liabilities, and owners' equity. It also defines key elements like assets, liabilities, owners' equity, revenues and expenses. Transactions must follow the accounting equation and be recorded and analyzed to maintain accurate financial records.
Cloud based <a>Online Accounting Software</a> for day to day needs of accountants and sme's, allows you to manage payroll, bookkeeping for free.
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The document discusses key concepts in financial accounting, including the accounting equation (Assets = Liabilities + Owners' Equity), balance sheets, and the basic elements they contain (assets, liabilities, owners' equity). It also covers revenues and expenses, how they impact owners' equity, and examples like sales of inventory that contain both revenue and expense elements. The document discusses various adjustments that may need to be made to accounting records like depreciation, interest, rent, and unearned revenue.
This document provides an introduction to basic accounting concepts including the accounting equation, balance sheet, income statement, assets, liabilities, equity, revenue, expenses, and net income. It uses examples like tracking personal finances to demonstrate how to calculate assets, liabilities, equity, and how equity amounts change as revenue is added and expenses are deducted. Key terms are defined and accounting is framed as ensuring the basic accounting equation is always balanced.
The document provides information about adjusting entries in accounting. It discusses:
1. The need to make adjusting entries to comply with the accrual basis of accounting and match revenues and expenses to the proper periods.
2. The main types of adjusting entries - prepayments (prepaid expenses and unearned revenues) and accruals (accrued revenues and accrued expenses).
3. Examples of specific adjusting entries for prepaid expenses, unearned revenues, accrued revenues, and accrued expenses.
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.
Basic Finanical Statment Preparation and Forecasting for Your StartupAnitaBell
This document summarizes a workshop on basic financial statement preparation and forecasting presented by BeachFleischman PC. The workshop objectives are to provide an introduction to basic financial statements including the balance sheet, statement of income, statement of cash flows and notes; an overview of forecasting methods; and strategies for forecasting revenue, expenses, and financing for startups. The document defines each financial statement and notes their purpose. It also outlines steps for forecasting revenue, expenses, and financing, including considerations for budgeting sales, costs, and funding sources like debt and equity.
The document provides an overview of basic financial accounting concepts. It explains that accounting is based on the accounting equation of Assets = Liabilities + Owners' Equity. The balance sheet expresses this equation by listing assets, liabilities, and owners' equity. It also defines key elements like assets, liabilities, owners' equity, revenues and expenses. Transactions must follow the accounting equation and be recorded and analyzed to maintain accurate financial records.
Cloud based <a>Online Accounting Software</a> for day to day needs of accountants and sme's, allows you to manage payroll, bookkeeping for free.
Learn More :- https://www.capium.com
The document discusses key concepts in financial accounting, including the accounting equation (Assets = Liabilities + Owners' Equity), balance sheets, and the basic elements they contain (assets, liabilities, owners' equity). It also covers revenues and expenses, how they impact owners' equity, and examples like sales of inventory that contain both revenue and expense elements. The document discusses various adjustments that may need to be made to accounting records like depreciation, interest, rent, and unearned revenue.
This document provides an introduction to basic accounting concepts including the accounting equation, balance sheet, income statement, assets, liabilities, equity, revenue, expenses, and net income. It uses examples like tracking personal finances to demonstrate how to calculate assets, liabilities, equity, and how equity amounts change as revenue is added and expenses are deducted. Key terms are defined and accounting is framed as ensuring the basic accounting equation is always balanced.
The document provides information about adjusting entries in accounting. It discusses:
1. The need to make adjusting entries to comply with the accrual basis of accounting and match revenues and expenses to the proper periods.
2. The main types of adjusting entries - prepayments (prepaid expenses and unearned revenues) and accruals (accrued revenues and accrued expenses).
3. Examples of specific adjusting entries for prepaid expenses, unearned revenues, accrued revenues, and accrued expenses.
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.
Basic Finanical Statment Preparation and Forecasting for Your StartupAnitaBell
This document summarizes a workshop on basic financial statement preparation and forecasting presented by BeachFleischman PC. The workshop objectives are to provide an introduction to basic financial statements including the balance sheet, statement of income, statement of cash flows and notes; an overview of forecasting methods; and strategies for forecasting revenue, expenses, and financing for startups. The document defines each financial statement and notes their purpose. It also outlines steps for forecasting revenue, expenses, and financing, including considerations for budgeting sales, costs, and funding sources like debt and equity.
The document discusses the accounting cycle process which involves analyzing transactions, recording journal entries, preparing adjusting entries, and generating financial statements on a monthly, quarterly, or annual basis. It provides an example for ABC Company for the month of January, showing the steps of preparing journal entries, a trial balance, income statement, retained earnings statement, and closing revenue and expense accounts. It also discusses how to prepare a post-closing trial balance, balance sheet, and statement of cash flows to complete the accounting cycle.
The document summarizes accounting concepts related to the recording process. It discusses [1] accounts and how they are used to record transactions, [2] debits and credits and how they affect account balances, and [3] the basic steps in recording transactions, including journalizing, posting to ledgers, and preparing a trial balance.
Accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users. The chapter discusses key accounting concepts such as the accounting equation, assets, liabilities, and owner's equity. It also explains the accounting process, accounting principles, and how business transactions affect the basic accounting equation. The chapter concludes with an explanation of the four main financial statements - the income statement, statement of owner's equity, balance sheet, and statement of cash flows - and how they are prepared.
The document summarizes the key steps in completing the accounting cycle, including preparing a work sheet, closing the books, and creating a post-closing trial balance. A work sheet is a multi-column form used to record adjustments and prepare financial statements. Closing the books involves transferring revenue, expense, and net income amounts to temporary accounts and then to owner's equity. The post-closing trial balance proves the equality of permanent account balances carried forward to the next period.
1) The document is from an educational publishing textbook about accounting. It discusses starting a proprietorship business and introduces key accounting concepts like the accounting equation and preparing a basic balance sheet.
2) The first nine chapters will use a music store proprietorship case study to demonstrate the accounting cycle and how transactions impact the accounting equation.
3) The accounting equation shows that assets must always equal liabilities plus owner's equity. Business transactions are analyzed by identifying which accounts are affected and how they impact this fundamental equation.
Introduction to Financial statements - AccountingFaHaD .H. NooR
Financial statement introduction and its elements.
There are three fundamental financial statements used in accounting.
The income statement shows revenues and expenses.
The balance sheet is a listing of all asset, liability, and equity account balances that do not appear on the income statement.
The statement of cash flows shows how the company receives and spends its cash.
CFO Insight For Business Owners: How to Utilize Financial StatementsChase R. Morrison
CFO Insight: This is a primer on how to use financial statements to more effectively operate a privately held business and was used to educate new entrepreneurs at the Valley Economic Development Corporation in Sherman Oaks, CA.
Accounting involves recording business transactions, posting them to ledgers, preparing financial statements, and analyzing profits and financial position. It includes assets owned, liabilities owed, equity invested, income earned from operations, expenses to generate income, and calculating profits or losses. The accounting cycle occurs daily, monthly, and yearly - with transactions recorded in journals and posted to ledgers, a trial balance prepared, then financial statements and analysis completed.
Learning Objective 1: To explain the nature and general purpose of financial statements.
Learning Objective 2: To explain certain accounting principles that are important for an understanding of financial statements and how professional judgment by accountants may affect the application of those principles.
Learning Objective 3: To demonstrate how certain business transactions affect the elements of the accounting equation: Assets = Liabilities + Owners’ Equity.
Learning Objective 4: To explain how the statement of financial position, often referred to as the balance sheet, is an expansion of the basic accounting equation.
Learning Objective 5: To explain how the income statement reports an enterprise’s financial performance for a period of time in terms of the relationship of revenues and expenses.
Learning Objective 6: To explain how the statement of cash flows presents the change in cash for a period of time in terms of the company’s operating, investing, and financing activities.
Learning Objective 7: To explain the important relationships among the statement of financial position, income statement, and statement of cash flows, and how these statements relate to each other.
Learning Objective 8: To explain common forms of business ownership—sole proprietorship, partnership, and corporation—and demonstrate how they differ in terms of their presentation in the statement of financial position.
Learning Objective 9: To discuss the importance of financial statements to a company and its investors and creditors and why management may take steps to improve the appearance of the company in its financial statements.
Accounting involves identifying, measuring, and communicating financial information about economic events to allow for informed judgments and decisions by users. The key functions of accounting are recording transactions, classifying financial events, summarizing data in financial statements, and communicating results. Users of accounting information include internal parties like management and owners as well as external parties like investors, lenders, suppliers, and regulators.
Basic Bookkeeping for Not-For-Profit OrganisationsDionysios Markou
The document provides an overview of basic bookkeeping for not-for-profit organisations. It discusses maintaining financial records such as receipts, payments, payroll and bank statements. It also covers cash versus accrual accounting, preparing a trial balance, balance sheet, profit and loss statement. The document stresses the importance of accountability, auditing financial reports annually and having bookkeeping procedures documented in a manual.
M6 L1 Financial Documents Used in a Small BusinessNCVPS
The document discusses key financial documents used in small businesses: the balance sheet, income statement, and statement of cash flows. It provides explanations of what each statement shows and the types of financial information included in them. The balance sheet presents a company's assets, liabilities, and owner's equity at a point in time. The income statement compares revenues and expenses over a period of time to determine profit/loss. The statement of cash flows tracks a company's cash inflows and outflows. Together these statements provide a comprehensive view of a company's financial health and performance.
The document discusses key financial statements and concepts for small businesses. It begins with an overview of common misconceptions about financial statements and then provides explanations of key statements and metrics. This includes defining balance sheets, income statements, and cash flow statements. It emphasizes the importance of accounting for inventory correctly on the balance sheet and demonstrating cash flow and working capital for stakeholders.
This document discusses accounting principles and practices. It defines key accounting concepts like generally accepted accounting principles (GAAP), assets, liabilities, and equity. It explains that GAAP are established by the Financial Accounting Standards Board and aim to standardize accounting practices. The document also outlines the basic accounting equation of assets = liabilities + equity and provides examples of common accounts for assets, liabilities, revenues, and expenses.
Basic Financial Statements - Financial AccountingFaHaD .H. NooR
Financial accounting
These slides will help you in understanding financial statements
A financial statements (or financial report) is a formal record of the financial activities and position of a business, person, or other entity.
Relevant financial information is presented in a structured manner and in a form easy to understand. They typically include basic financial statements, accompanied by a management discussion and analysis.
A balance sheet, also referred to as a statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.
An income statement, also known as a statement of comprehensive income, statement of revenue & expense, P&L or profit and loss report, reports on a company's income, expenses, and profits over a period of time. A profit and loss statement provides information on the operation of the enterprise. These include sales and the various expenses incurred during the stated period.
A Statement of changes in equity, also known as equity statement or statement of retained earnings, reports on the changes in equity of the company during the stated period.
A cash flow statement reports on a company's cash flow activities, particularly its operating, investing and financing activities.
For large corporations, these statements may be complex and may include an extensive set of footnotes to the financial statements and management discussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.
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.
The document discusses balance sheets, which summarize a business's assets, liabilities, and owner's equity at a point in time. The accounting equation of assets = liabilities + owner's equity must always balance. Assets are resources expected to provide future economic benefits, while liabilities are obligations that will require an outflow of resources. Owner's equity is the residual claim on assets after deducting liabilities. The balance sheet classifies items as current or non-current based on their liquidity or due dates within one year. Transactions affect the balance sheet by changing asset, liability, or equity account balances in a way that maintains the accounting equation. Assets are recorded on the balance sheet at their original historical cost.
The document provides a basic primer on understanding financial statements for beginners. It explains the two key financial statements - the balance sheet and income statement. The balance sheet reflects a company's financial makeup and standing at a point in time, showing assets, liabilities, and net worth. The income statement reflects revenues and expenses for the current year to show net profit or loss. Net profit on the income statement flows to net worth on the balance sheet.
This document provides an overview of basic bookkeeping concepts including debits and credits, cash vs. accrual accounting, T-accounts, the chart of accounts, income and expense accounts, and how to set up journals, income statements, and a balance sheet. It discusses the importance of keeping accurate financial records for a business and introduces key accounting principles and terminology.
This document provides an overview of basic financial accounting concepts, including the accounting equation, balance sheets, assets, liabilities, owners' equity, revenues, expenses, transactions, historical cost, adjustments, interest, rent, depreciation, and unearned revenue. It explains that the accounting equation must always balance, assets represent resources owned, liabilities are obligations, and owners' equity is the residual claim on assets. Revenues increase owners' equity while expenses decrease it.
The document discusses basic concepts of financial accounting including the accounting equation, balance sheets, and key elements like assets, liabilities, owners' equity, revenues, and expenses. It explains that the accounting equation must always balance, with assets equal to liabilities plus owners' equity. Transactions can increase or decrease different elements of the balance sheet to maintain the balance of the equation. Historical costs, revenues, expenses, adjustments, and other accounting concepts are also summarized.
The document discusses the accounting cycle process which involves analyzing transactions, recording journal entries, preparing adjusting entries, and generating financial statements on a monthly, quarterly, or annual basis. It provides an example for ABC Company for the month of January, showing the steps of preparing journal entries, a trial balance, income statement, retained earnings statement, and closing revenue and expense accounts. It also discusses how to prepare a post-closing trial balance, balance sheet, and statement of cash flows to complete the accounting cycle.
The document summarizes accounting concepts related to the recording process. It discusses [1] accounts and how they are used to record transactions, [2] debits and credits and how they affect account balances, and [3] the basic steps in recording transactions, including journalizing, posting to ledgers, and preparing a trial balance.
Accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users. The chapter discusses key accounting concepts such as the accounting equation, assets, liabilities, and owner's equity. It also explains the accounting process, accounting principles, and how business transactions affect the basic accounting equation. The chapter concludes with an explanation of the four main financial statements - the income statement, statement of owner's equity, balance sheet, and statement of cash flows - and how they are prepared.
The document summarizes the key steps in completing the accounting cycle, including preparing a work sheet, closing the books, and creating a post-closing trial balance. A work sheet is a multi-column form used to record adjustments and prepare financial statements. Closing the books involves transferring revenue, expense, and net income amounts to temporary accounts and then to owner's equity. The post-closing trial balance proves the equality of permanent account balances carried forward to the next period.
1) The document is from an educational publishing textbook about accounting. It discusses starting a proprietorship business and introduces key accounting concepts like the accounting equation and preparing a basic balance sheet.
2) The first nine chapters will use a music store proprietorship case study to demonstrate the accounting cycle and how transactions impact the accounting equation.
3) The accounting equation shows that assets must always equal liabilities plus owner's equity. Business transactions are analyzed by identifying which accounts are affected and how they impact this fundamental equation.
Introduction to Financial statements - AccountingFaHaD .H. NooR
Financial statement introduction and its elements.
There are three fundamental financial statements used in accounting.
The income statement shows revenues and expenses.
The balance sheet is a listing of all asset, liability, and equity account balances that do not appear on the income statement.
The statement of cash flows shows how the company receives and spends its cash.
CFO Insight For Business Owners: How to Utilize Financial StatementsChase R. Morrison
CFO Insight: This is a primer on how to use financial statements to more effectively operate a privately held business and was used to educate new entrepreneurs at the Valley Economic Development Corporation in Sherman Oaks, CA.
Accounting involves recording business transactions, posting them to ledgers, preparing financial statements, and analyzing profits and financial position. It includes assets owned, liabilities owed, equity invested, income earned from operations, expenses to generate income, and calculating profits or losses. The accounting cycle occurs daily, monthly, and yearly - with transactions recorded in journals and posted to ledgers, a trial balance prepared, then financial statements and analysis completed.
Learning Objective 1: To explain the nature and general purpose of financial statements.
Learning Objective 2: To explain certain accounting principles that are important for an understanding of financial statements and how professional judgment by accountants may affect the application of those principles.
Learning Objective 3: To demonstrate how certain business transactions affect the elements of the accounting equation: Assets = Liabilities + Owners’ Equity.
Learning Objective 4: To explain how the statement of financial position, often referred to as the balance sheet, is an expansion of the basic accounting equation.
Learning Objective 5: To explain how the income statement reports an enterprise’s financial performance for a period of time in terms of the relationship of revenues and expenses.
Learning Objective 6: To explain how the statement of cash flows presents the change in cash for a period of time in terms of the company’s operating, investing, and financing activities.
Learning Objective 7: To explain the important relationships among the statement of financial position, income statement, and statement of cash flows, and how these statements relate to each other.
Learning Objective 8: To explain common forms of business ownership—sole proprietorship, partnership, and corporation—and demonstrate how they differ in terms of their presentation in the statement of financial position.
Learning Objective 9: To discuss the importance of financial statements to a company and its investors and creditors and why management may take steps to improve the appearance of the company in its financial statements.
Accounting involves identifying, measuring, and communicating financial information about economic events to allow for informed judgments and decisions by users. The key functions of accounting are recording transactions, classifying financial events, summarizing data in financial statements, and communicating results. Users of accounting information include internal parties like management and owners as well as external parties like investors, lenders, suppliers, and regulators.
Basic Bookkeeping for Not-For-Profit OrganisationsDionysios Markou
The document provides an overview of basic bookkeeping for not-for-profit organisations. It discusses maintaining financial records such as receipts, payments, payroll and bank statements. It also covers cash versus accrual accounting, preparing a trial balance, balance sheet, profit and loss statement. The document stresses the importance of accountability, auditing financial reports annually and having bookkeeping procedures documented in a manual.
M6 L1 Financial Documents Used in a Small BusinessNCVPS
The document discusses key financial documents used in small businesses: the balance sheet, income statement, and statement of cash flows. It provides explanations of what each statement shows and the types of financial information included in them. The balance sheet presents a company's assets, liabilities, and owner's equity at a point in time. The income statement compares revenues and expenses over a period of time to determine profit/loss. The statement of cash flows tracks a company's cash inflows and outflows. Together these statements provide a comprehensive view of a company's financial health and performance.
The document discusses key financial statements and concepts for small businesses. It begins with an overview of common misconceptions about financial statements and then provides explanations of key statements and metrics. This includes defining balance sheets, income statements, and cash flow statements. It emphasizes the importance of accounting for inventory correctly on the balance sheet and demonstrating cash flow and working capital for stakeholders.
This document discusses accounting principles and practices. It defines key accounting concepts like generally accepted accounting principles (GAAP), assets, liabilities, and equity. It explains that GAAP are established by the Financial Accounting Standards Board and aim to standardize accounting practices. The document also outlines the basic accounting equation of assets = liabilities + equity and provides examples of common accounts for assets, liabilities, revenues, and expenses.
Basic Financial Statements - Financial AccountingFaHaD .H. NooR
Financial accounting
These slides will help you in understanding financial statements
A financial statements (or financial report) is a formal record of the financial activities and position of a business, person, or other entity.
Relevant financial information is presented in a structured manner and in a form easy to understand. They typically include basic financial statements, accompanied by a management discussion and analysis.
A balance sheet, also referred to as a statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.
An income statement, also known as a statement of comprehensive income, statement of revenue & expense, P&L or profit and loss report, reports on a company's income, expenses, and profits over a period of time. A profit and loss statement provides information on the operation of the enterprise. These include sales and the various expenses incurred during the stated period.
A Statement of changes in equity, also known as equity statement or statement of retained earnings, reports on the changes in equity of the company during the stated period.
A cash flow statement reports on a company's cash flow activities, particularly its operating, investing and financing activities.
For large corporations, these statements may be complex and may include an extensive set of footnotes to the financial statements and management discussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.
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.
The document discusses balance sheets, which summarize a business's assets, liabilities, and owner's equity at a point in time. The accounting equation of assets = liabilities + owner's equity must always balance. Assets are resources expected to provide future economic benefits, while liabilities are obligations that will require an outflow of resources. Owner's equity is the residual claim on assets after deducting liabilities. The balance sheet classifies items as current or non-current based on their liquidity or due dates within one year. Transactions affect the balance sheet by changing asset, liability, or equity account balances in a way that maintains the accounting equation. Assets are recorded on the balance sheet at their original historical cost.
The document provides a basic primer on understanding financial statements for beginners. It explains the two key financial statements - the balance sheet and income statement. The balance sheet reflects a company's financial makeup and standing at a point in time, showing assets, liabilities, and net worth. The income statement reflects revenues and expenses for the current year to show net profit or loss. Net profit on the income statement flows to net worth on the balance sheet.
This document provides an overview of basic bookkeeping concepts including debits and credits, cash vs. accrual accounting, T-accounts, the chart of accounts, income and expense accounts, and how to set up journals, income statements, and a balance sheet. It discusses the importance of keeping accurate financial records for a business and introduces key accounting principles and terminology.
This document provides an overview of basic financial accounting concepts, including the accounting equation, balance sheets, assets, liabilities, owners' equity, revenues, expenses, transactions, historical cost, adjustments, interest, rent, depreciation, and unearned revenue. It explains that the accounting equation must always balance, assets represent resources owned, liabilities are obligations, and owners' equity is the residual claim on assets. Revenues increase owners' equity while expenses decrease it.
The document discusses basic concepts of financial accounting including the accounting equation, balance sheets, and key elements like assets, liabilities, owners' equity, revenues, and expenses. It explains that the accounting equation must always balance, with assets equal to liabilities plus owners' equity. Transactions can increase or decrease different elements of the balance sheet to maintain the balance of the equation. Historical costs, revenues, expenses, adjustments, and other accounting concepts are also summarized.
The document discusses key concepts in financial accounting, including the accounting equation of Assets = Liabilities + Owners' Equity. It explains that the balance sheet is an expanded expression of this equation. It also defines assets, liabilities, owners' equity, revenues and expenses, and how various transactions affect the accounting equation. Specific topics covered include historical cost, depreciation, interest, rent, sales of inventory, adjustments to accounts, and unearned revenue.
The document discusses key concepts in financial accounting, including the accounting equation (Assets = Liabilities + Owners' Equity), transaction analysis, revenues, expenses, and adjustments. It explains that the accounting equation must always balance, and transactions may affect asset, liability, or owners' equity accounts. Revenues increase owners' equity while expenses decrease it. Interest is computed based on principal, interest rate, and time period.
Accounting and management unit one and basicsmbadepartment5
The document discusses key concepts in financial accounting including the accounting equation, assets, liabilities, owners' equity, revenues, expenses, and transactions. It explains that the accounting equation is Assets = Liabilities + Owners' Equity and must always balance. Transactions are analyzed to determine their impact on accounts to maintain the balance of the equation. Revenues increase owners' equity while expenses decrease owners' equity.
The document discusses key concepts in financial accounting including the accounting equation, balance sheets, income statements, and owners' equity. It explains that the accounting equation is Assets = Liabilities + Owners' Equity and must always balance. Transactions are analyzed to determine their impact on the equation. Financial statements like the balance sheet and income statement are prepared at the end of an accounting period to summarize a firm's financial position and performance.
The document discusses the basic accounting equation of Assets = Liabilities + Owners' Equity. It provides examples of how transactions affect the balance sheet through increases and decreases to asset, liability, and owners' equity accounts. Revenues increase owners' equity, while expenses decrease owners' equity. Financial statements like the balance sheet and income statement are prepared using transaction data to report on a company's financial position and performance.
The document discusses the basic accounting equation of Assets = Liabilities + Owners' Equity. It provides examples of how transactions affect the balance sheet through increases and decreases to asset, liability, and owners' equity accounts. Revenues increase owners' equity, while expenses decrease owners' equity. Financial statements like the balance sheet and income statement are prepared using transaction data to report on a company's financial position and performance.
accents general genreal about basics alwaysbayadnako
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 owners' equity on the statement of owners' equity.
The document discusses the basic accounting equation of Assets = Liabilities + Owners' Equity. It provides examples of how transactions affect the balance sheet through increases and decreases to asset, liability, and owners' equity accounts. Revenues increase owners' equity, while expenses decrease owners' equity. Financial statements like the balance sheet and income statement are prepared by analyzing transactions according to the basic accounting equation.
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.
The document discusses the basic accounting equation of Assets = Liabilities + Owners' Equity. It provides examples of how transactions affect the balance sheet through increases and decreases to asset, liability, and owners' equity accounts. Revenues increase owners' equity, while expenses decrease owners' equity. Financial statements like the balance sheet and income statement are prepared using transaction data to report on a company's financial position and performance.
The document provides an overview of basic financial accounting concepts. It explains that accounting is based on the accounting equation of assets equaling liabilities plus owners' equity. Assets are valuable resources owned, while liabilities are obligations, and owners' equity is the residual interest in assets. Revenues increase owners' equity by providing goods/services, while expenses decrease it by consuming resources to generate revenue. Financial statements like the balance sheet present a company's assets, liabilities, and owners' equity at a point in time.
The document provides an overview of basic financial accounting concepts. It explains that accounting is based on the accounting equation of assets equaling liabilities plus owners' equity. Assets are valuable resources owned, while liabilities are obligations, and owners' equity is the residual interest in assets. Revenues increase owners' equity by providing goods/services, while expenses decrease it by consuming resources to generate revenue. Financial statements like the balance sheet present a company's assets, liabilities, and owners' equity at a point in time.
Here are the solutions to the selected problems from Chapter 17:
P17-7A:
Accounts receivable, December 31, 2009 $90,000
Estimated uncollectible accounts (3% of receivables) 2,700
Net accounts receivable $87,300
Accounts receivable, December 31, 2010 $110,000
Estimated uncollectible accounts (5% of receivables) 5,500
Net accounts receivable $104,500
Increase in net accounts receivable $17,200
P17-9A:
Accounts receivable, January 1 $80,000
Credit sales for January 150,000
Collections for January (120,000)
Here are the solutions to the selected problems from Chapter 17:
P17-7A:
Accounts receivable, December 31, 2009 $90,000
Estimated uncollectible accounts (3% of receivables) 2,700
Net accounts receivable $87,300
Accounts receivable, December 31, 2010 $110,000
Estimated uncollectible accounts (5% of receivables) 5,500
Net accounts receivable $104,500
Increase in estimated uncollectible accounts $3,200
P17-9A:
Accounts receivable, January 1 $80,000
Credit sales for January 30,000
Collections for January (25,000)
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 presentation is based on the subject Financial Accounting which helps the beginners to know the basic concept of accounting . This is according to the syllabus of Pt. Ravishankar University , Raipur and Durg University, Durg.
Ammad awan glasgow - how to make your money work for youAmmadAwanGlasgow
Ammad Awan Glasgow finance accounting services makes sure that the regulatory changes are integrated with the existing software and databases and the penalties arising from non compliance can be safely avoided.
Ammad Awan Glasgow is also responsible for ensuring that profitable sales volume and strategic objective targets are met for the assigned key accounts.
Ammad awan glasgow - role of financial management in the efficiency of financ...AmmadAwanGlasgow
Financial management is a regulated and continuous process that includes many actions such as planning, regulation, guidance, and control of how to use the current and future financial sources.
Ammad awan glasgow - personal financial planningAmmadAwanGlasgow
Ammad Awan Glasgow is also responsible for ensuring that profitable sales volume and strategic objective targets are met for the assigned key accounts.
Ammad awan glasgow - business growth tips on how to grow sustainablyAmmadAwanGlasgow
Ammad Awan Glasgow supply chain management framework will be arranged with the producers of clinical providers, retailers, the calculated branch of primary clinics.
The effective management of cash is one of the keys for a successful organization, seldom will these start-ups survive till the next round of funding. Above all, the investors would definitely look at the management capabilities before granting additional funds. As such, the stability of a start-up somewhat depends on the strength of cash flow, which is the lifeblood of any business.
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2. The Basic Accounting
Equation
• Financial accounting is based upon the
accounting equation.
Assets = Liabilities + Owners' Equity
– This is a mathematical equation which
must balance.
– If assets total $300 and liabilities total
$200, then owners' equity must be $100.
4. The Basic Accounting
Equation
Balance Sheet
Assets Liabilities and Owners’ Equity
Cash 5,000 Liabilities
Accounts receivable 7,000 Accounts payable 8,000
Inventory 10,000 Notes payable 2,000
Equipment 7,000 Total liabilities 10,000
Owners’ equity 19,000
Total assets 29,000 Total liabilities and
owners’ equity 29,000
5. Assets
• Assets are valuable resources that are
owned by a firm.
– They represent probable future economic
benefits and arise as the result of past
transactions or events.
6. Liabilities
• Liabilities are present obligations of
the firm.
– They are probable future sacrifices of
economic benefits which arise as the
result of past transactions or events.
7. Owners' Equity
• Owners' equity represents the
owners' residual interest in the assets
of the business.
– Residual interest is another name for
owners' equity.
8. Owners' Equity
• Owners may make a direct investment
in the business or operate at a profit
and leave the profit in the business.
9. Owners' Equity
• Yet another name for owners' equity is
net assets.
– Indicates that owners' equity results
when liabilities are subtracted from
assets.
Owners’ Equity = Assets – Liabilities
13. Analyzing Transactions
• Transaction analysis is the central
component of the financial accounting
process.
– Remember that every transaction must
keep the accounting equation in balance.
14. The Entity Assumption
• The entity assumption dictates that
business records must be kept
separate and distinct from the
personal records of the owners.
– If a person owns more than one business,
then each business must have its own set
of records.
15. A transaction may do one of
several things:
• It may increase both the asset side and
the liabilities and owners' equity side.
• It may decrease both the asset side
and the liabilities and owners' equity
side.
16. A transaction may do one of
several things:
• It may cause both an increase and a
decrease on the asset side.
• It may cause both an increase and a
decrease on the liabilities and owners'
equity side.
17. A transaction may do one of
several things:
• Regardless of what transaction occurs,
the accounting equation must be in
balance after the transaction is
analyzed.
18. Historical Cost
• Historical cost is used for the
recording of an asset.
• It is the exchange price on the date of
the acquisition of the asset.
19. Historical Cost
• Even though over time an asset's
value may increase above the
historical cost, that cost is still kept on
the books because the number is
considered to be reliable.
20. Revenues
• Revenues are inflows of assets (or
reductions in liabilities) in exchange
for providing goods and services to
customers.
– A retail store such as Wal-Mart earns
revenues by selling goods to customers.
– A CPA firm earns revenues by providing
services such as tax return preparation or
auditing.
21. Revenues
• Critically important point:
– Cash need not be received in order for
revenue to be recorded.
– Revenues are earned when a company
does what it is supposed to do according
to a contract.
22. Consider the following
example:
• A magazine company receives $24,
which represents a year's subscription.
• The subscriber, of course, pays in
advance.
23. Consider the following
example:
• Unearned revenues are usually settled
by the performance of a service, unlike
other liabilities which are usually
settled by the payment of cash.
24. Expenses
• Expenses occur when resources are
consumed in order to generate
revenue.
• They are the cost of doing business.
– Examples include rent, salaries and
wages, insurance, electricity, utilities, and
the like.
26. Expenses
• A critically important point similar to
that for revenues holds true for
expenses.
– A business need not pay out cash in order
to have to record that an expense has
occurred.
27. Examples of Payables
• Notes payable—written obligations.
• Accounts payable—unwritten
obligations that arise in the normal
operations of a business.
• Wages payable.
28. Examples of Payables
PPaayyaabbllee AAccccoouunnttss
ASSETS = LIABILITIES + OWNERS’ EQUITY
Utilities
payable
+120
H.Jacobs, capital
Utility expense
–$120
29. Adjustments to Accounts
• An amount may not have been
recorded in an account at all.
– The amount will have to be recorded
before the financial statements are
prepared so that all the information will
be correct.
30. Interest
• Interest is a rental charge for the use
of money.
– It is computed by multiplying the
principal (or borrowed amount) by the
interest rate and by the period of time
involved.
31. Interest
• Since the interest rate is an annual
rate, the time period must also be an
annual period.
– If the time is given in months, then the
time fraction will have 12 in the
denominator.
32. Interest
• Since the interest rate is an annual
rate, the time period must also be an
annual period.
– If a company borrowed $12,000 at 10%
for three months, and one month has
elapsed, then accumulated interest is
computed as follows:
$12,000 X .10 X 1/12 = $100
33. Interest
• Since the interest rate is an annual
rate, the time period must also be an
annual period.
– If the time is given in days, then the time
fraction will have 360 (bobtail or banker's
year) or 365 in the denominator.
34. Interest
• Since the interest rate is an annual
rate, the time period must also be an
annual period.
– The number 360 is used in the
denominator because it eases
computations.
35. Interest
• Since the interest rate is an annual
rate, the time period must also be an
annual period.
– The number 360 is also used by some
financial institutions because it results in
more interest for them.
36. Rent
• If a business prepays $6,000 for five
months' worth of rent, and if two
months have gone by, then the
business has incurred $2,400 of
expense—$1,200 per month for two
months.
– The same is true for other items paid in
advance, such as insurance.
38. Depreciation
• If a machine cost $5,000 and has a
salvage value of $500, with a useful
life of five years, then the depreciation
expense per year will be $900.
($5,000 $500)
5years $900
40. Unearned Revenue
• If a company has unearned revenue,
then it may have earned revenue as
time has elapsed because it has
provided the service to the customer.
– The liability "Unearned Revenue" will
have to be decreased, and revenue will
have to be recorded.
41. Unearned Revenue
• Using the magazine example, if three
months' worth of magazines have
been sent to the subscriber, then the
company will reduce its liability and
increase its revenues by $6.
3 months X $2/month = $6
42. The Balance Sheet
• The balance sheet shows a firm's
assets, liabilities, and owner's equity
at one point in time.
– The date on the balance sheet will be a
single date, such as December 31 or
June 30.
43. Balance Sheet
January 31, 2000
Assets Liabilities and Owners’ Equity
Cash $ 32,500 Liabilities
Accounts receivable 4,400 Accounts payable $ 30,000
Prepaid rent 11,000 Unearned revenue 50
Inventory 27,800 Utilities payable 120
Equipment 27,792 Interest payable 133
Total assets $100,492 Notes payable 20,000
Total liabilities 50,303
H.Jacobs, capital 50,189
Total liabilities and
owners’ equity $100,492
44. The Income Statement
• The income statement summarizes a
firm's revenues and expenses for a
period of time.
– The date on the income statement will
be a phrase such as, "For the month
ended July 31," or "For the year ended
December 31."
45. The Income Statement
• If revenues exceed expenses, then the
result is net income.
• If expenses exceed revenues, then the
result is a net loss.
46. The Income Statement
• Only revenues and expenses appear
on the income statement.
– Students sometimes think that cash is a
good thing and should appear on the
income statement.
– Cash is an asset and so will appear on the
balance sheet.
47. Income Statement
For the Month Ended January 31, 2000
Revenues
Sales $ 4,000
Service
650
Total revenue 4,650
Expenses
Cost of goods sold 2,200
Rent 1,000
Salary 700
Depreciation 208
Interest 133
Utilities 120
Total expenses 4,361
Net income $ 289
48. The Statement of Owners'
Equity
• The statement of owners' equity
summarizes the changes that took
place in owners' equity during the
period under review.
49. The Statement of Owners'
Equity
• It will have the same date as does the
income statement.
• It shows results over a period of time,
not just at one point in time.
50. The Statement of Owners'
Equity
• The statement starts with the
beginning balance of owners' equity
and adds in any owner investment
and net income.
• If there are withdrawals, then they are
subtracted, as is a net loss.
51. The Statement of Owners'
Equity
• A business will have either a net
income or a net loss, not both.
52. The Statement of Owners'
Equity
Statement of Owners’ Equity
For the Month Ended January 31, 2000
Balance, January 1 $ 0
Investment by owner $ 50,000
Net income 289
Withdrawal by owner (100)
Balance, January 31 $ 50,189
53. Relationship Between Balance
Sheet and Income Statement
• Changes in net income, owner
contributions, and owner
withdrawals, all of which affect
owners' equity, explain changes in net
assets.
54. The Accrual Basis of
Accounting
• The accrual basis of accounting
records revenues when goods have
been delivered or services have been
performed, regardless of when cash is
received.
55. The Accrual Basis of
Accounting
• This basis also records expenses when
resources are consumed, regardless of
when payment is made.