The document provides an overview of business purposes and operations, ownership structures, and key financial statements. It then summarizes the acquisition and capitalization of long-term assets for businesses. Specifically:
1) Businesses are formed to make a profit by providing goods/services. They require capital from owners/investors or creditors and can be for-profit or not-for-profit.
2) Businesses operate as service organizations, merchandisers, manufacturers, or financial services. Ownership structures include sole proprietorships, partnerships, or corporations.
3) The four basic financial statements are the balance sheet, income statement, statement of owners' equity, and statement of cash flows. These provide
"Selection, Hiring, Orientation And Training For The Internet Department" - ...DealerKnows Consulting
Joe Webb's presentation Selection, Hiring, Orientation and Training for the Internet Department from the 7th Digital Dealer Conference in Nashville. Joe Webb is the President of DealerKnows Consulting and would like to thank everyone in attendance at his jam-packed event for their participation. I appreciate the great response and wish you success if your hiring endeavors.
A high level look at considerations for training new employees. Compares new employee orientation for geographically dispersed employees to the starfish model of business design.
Five Steps to a world class onboarding program presentationEmilyBennington
Onboarding is gaining a lot of traction in business lately – and for good reason. When implemented effectively, onboarding programs have been proven to dramatically reduce expenses by helping your new staff assimilate faster, stay longer, and deliver better. For mid-to-senior level managers who want to learn how it works - including best practices from companies that are getting it right – this presentation is a must-attend. Emily Bennington, coauthor of Effective Immediately: How to Fit In, Stand Out, and Move Up at Your First Real Job, will show you how to design and implement a successful onboarding program for your intern and new grad hires that will address both YOUR organizational goals and THEIR career planning needs. You’ve made a significant investment recruiting top talent, right? So keep the promise you’ve made during the hiring cycle and give them the best possible chance to succeed in your organization FROM BEFORE DAY ONE.
This ppt has been prepared keeping in mind to give basic idea on ACCOUNTING. This is meant for CLASS - XI COMMERCE students who are doing education on +2 Commerce under CBSE / ICSE / State board in different states.
"Selection, Hiring, Orientation And Training For The Internet Department" - ...DealerKnows Consulting
Joe Webb's presentation Selection, Hiring, Orientation and Training for the Internet Department from the 7th Digital Dealer Conference in Nashville. Joe Webb is the President of DealerKnows Consulting and would like to thank everyone in attendance at his jam-packed event for their participation. I appreciate the great response and wish you success if your hiring endeavors.
A high level look at considerations for training new employees. Compares new employee orientation for geographically dispersed employees to the starfish model of business design.
Five Steps to a world class onboarding program presentationEmilyBennington
Onboarding is gaining a lot of traction in business lately – and for good reason. When implemented effectively, onboarding programs have been proven to dramatically reduce expenses by helping your new staff assimilate faster, stay longer, and deliver better. For mid-to-senior level managers who want to learn how it works - including best practices from companies that are getting it right – this presentation is a must-attend. Emily Bennington, coauthor of Effective Immediately: How to Fit In, Stand Out, and Move Up at Your First Real Job, will show you how to design and implement a successful onboarding program for your intern and new grad hires that will address both YOUR organizational goals and THEIR career planning needs. You’ve made a significant investment recruiting top talent, right? So keep the promise you’ve made during the hiring cycle and give them the best possible chance to succeed in your organization FROM BEFORE DAY ONE.
This ppt has been prepared keeping in mind to give basic idea on ACCOUNTING. This is meant for CLASS - XI COMMERCE students who are doing education on +2 Commerce under CBSE / ICSE / State board in different states.
The Balance SheetA balance sheet is the financial statement that.docxmattinsonjanel
The Balance Sheet
A balance sheet is the financial statement that reports a firm’s financial condition at a specific time. As highlighted in the sample balance sheet in Figure 17.5 (for our hypothetical vegetarian restaurant Very Vegetarian introduced in Chapter 13), assets are listed in a separate column from liabilities and owners’ (or stockholders’) equity. The assets are equal to, or balanced with, the liabilities and owners’ (or stockholders’) equity. The balance sheet is that simple.
figure 17.5: SAMPLE VERY VEGETARIAN BALANCE SHEET
Current assets: Items that can be converted to cash within one year.
Fixed assets: Items such as land, buildings, and equipment that are relatively permanent.
Intangible assets: Items of value such as patents and copyrights that don’t have a physical form.
Current liabilities: Payments that are due in one year or less.
Long-term liabilities: Payments not due for one year or longer.
Owner’s equity: The value of what stockholders own in a firm (also called stockholder’s equity).
balance sheet
Financial statement that reports a firm’s financial condition at a specific time and is composed of three major accounts: assets, liabilities, and owners’ equity.
Let’s say you want to know what your financial condition is at a given time. Maybe you want to buy a house or car and therefore need to calculate your available resources. One of the best measuring sticks is your balance sheet. First, add up everything you own—cash, property, and money owed you. These are your assets. Subtract from that the money you owe others—credit card debt, IOUs, car loan, and student loan. These are your liabilities. The resulting figure is your net worth, or equity. This is fundamentally what companies do in preparing a balance sheet: they follow the procedures set in the fundamental accounting equation. In that preparation, it’s important to follow generally accepted accounting principles (GAAP).
Since it’s critical that you understand the financial information on the balance sheet, let’s take a closer look at what is in a business’s asset account and what is in its liabilities and owners’ equity accounts.
Classifying Assets
Assets are economic resources (things of value) owned by a firm. Assets include productive, tangible items such as equipment, buildings, land, furniture, and motor vehicles that help generate income, as well as intangible items with value like patents, trademarks, copyrights, and goodwill. Goodwill represents the value attached to factors such as a firm’s reputation, location, and superior products. Goodwill is included on a balance sheet when one firm acquires another and pays more for it than the value of its tangible assets. Intangible assets like brand names can be among the firm’s most valuable resources. Think of the value of brand names such as Starbucks, Coca-Cola, McDonald’s, and Apple. Not all companies, however, list intangible assets on their balance sheets.
assets
Economic resources (things of val ...
Accounting - Lesson 3 : The Business Transactions Elearningpower
This Video online accounting course is
designed for those with little or no
experience in bookkeeping or accounting
and may be of interest to those looking to
review their basic knowledge of accounting.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
MATATAG CURRICULUM: ASSESSING THE READINESS OF ELEM. PUBLIC SCHOOL TEACHERS I...NelTorrente
In this research, it concludes that while the readiness of teachers in Caloocan City to implement the MATATAG Curriculum is generally positive, targeted efforts in professional development, resource distribution, support networks, and comprehensive preparation can address the existing gaps and ensure successful curriculum implementation.
This slide is special for master students (MIBS & MIFB) in UUM. Also useful for readers who are interested in the topic of contemporary Islamic banking.
How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
Safalta Digital marketing institute in Noida, provide complete applications that encompass a huge range of virtual advertising and marketing additives, which includes search engine optimization, virtual communication advertising, pay-per-click on marketing, content material advertising, internet analytics, and greater. These university courses are designed for students who possess a comprehensive understanding of virtual marketing strategies and attributes.Safalta Digital Marketing Institute in Noida is a first choice for young individuals or students who are looking to start their careers in the field of digital advertising. The institute gives specialized courses designed and certification.
for beginners, providing thorough training in areas such as SEO, digital communication marketing, and PPC training in Noida. After finishing the program, students receive the certifications recognised by top different universitie, setting a strong foundation for a successful career in digital marketing.
Introduction to AI for Nonprofits with Tapp NetworkTechSoup
Dive into the world of AI! Experts Jon Hill and Tareq Monaur will guide you through AI's role in enhancing nonprofit websites and basic marketing strategies, making it easy to understand and apply.
The simplified electron and muon model, Oscillating Spacetime: The Foundation...RitikBhardwaj56
Discover the Simplified Electron and Muon Model: A New Wave-Based Approach to Understanding Particles delves into a groundbreaking theory that presents electrons and muons as rotating soliton waves within oscillating spacetime. Geared towards students, researchers, and science buffs, this book breaks down complex ideas into simple explanations. It covers topics such as electron waves, temporal dynamics, and the implications of this model on particle physics. With clear illustrations and easy-to-follow explanations, readers will gain a new outlook on the universe's fundamental nature.
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
"Protectable subject matters, Protection in biotechnology, Protection of othe...
Test01
1. ACG2021
Chapter 1
Business: What’s It all about
Purpose of a business (LO 1)
I. A business is formed to provide goods or services for the purpose of making a profit
for its owner or owners
II. To start a business you need capital
a. Capital comes from investors (owners)
b. Capital comes from creditors (lenders)
III. Businesses can be classified as a for-profit organization (enterprise) or a not-for-
profit organization (formed solely to help people)
The nature of business operations (LO 1)
I. The operation of the business depends on what it is organized to do.
II. There are four types of businesses
a. Service organization – provides services (does something for you) rather than
selling something
i. Law firm, doctor’s office, etc.
b. Merchandising business – buys goods, adds value to them, then sells them to
customers
i. Wholesale merchandiser – buys goods, adds value, then sells them to
other companies
1. Sam’s Club, Cosco – the middleman
ii. Retail merchandiser – buys goods, adds value, then sells them to “final
consumers”
1. Gap, Best Buy
c. Manufacturer – makes the products it sells
i. Ford Motor Company
d. Financial services company – doesn’t make tangible products and doesn’t sell
products made by other companies; deals in services related to money
i. Stock brokers
Ownership structure of a business (LO 1)
I. Business ownership usually takes one of three forms
a. Sole proprietorships (Mom and Pop)
i. Single person owns the business
2. ii. Not separate from its owner in terms of responsibility and liability
iii. The business is the owner and the owner is the business
b. Partnerships
i. Owned by two or more people
ii. Similar to a sole proprietorship
iii. Not separate from the owners in terms of responsibility and liability
c. Corporations
i. Legally separate and financially separate from the owners
ii. Ownership in a corporation is divided into units called shares of capital
stock
iii. Owners are called shareholders or stockholders
iv. Corporations are separate legal entities
Overview of the financial statements (LO 4)
What is the purpose of accounting?
To provide financial information for decision makers within (e.g. managers) and outside
(e.g. stockholders, lenders) an organization
Financial accounting (primarily for external decision making):
Useful to parties outside of an organization
Generally Accepted Accounting Principles (GAAP) – The rules for preparing the
financial statements i.e. Income Statement, Statement of Owner’s Equity, Balance Sheet, and
Cash flow statement).
Useful for easy comparisons for decision making
Financial Accounting Standards Board (FASB) – The group that is responsible for
establishing the rules.
Four basic financial statements
I. Balance sheet (“the accounting equation)”
Assets = Liabilities + Owners’ Equity (A = L + OE)
Assets = Liabilities + Contributed Capital + Retained Earnings
a. Describes the financial position of the company at a specific point in time
(Snapshot in time)
3. b. Assets
i. Things of value owned by a business
ii. Provide future benefit
iii. Examples: cash, property, machinery, or anything else that helps a
company generate cash flow
c. Liabilities
i. Claims to the assets by creditors
ii. Amounts owed to those who have loaned to the company
iii. Examples: amount owed to creditors (creditors have claim to assets if
liabilities aren’t paid)
d. Owners’ equity (stockholders’ equity or shareholders’ equity)
i. Claims to the assets by the owners
ii. Also called net assets (Assets – Liabilities)
iii. Composed of Contributed Capital + Retained Earnings
II. Income statement
Revenues – Expenses = Net Income
Revenue = what a company receives from providing goods and services to customers
Expense = what a company incurs from providing goods and services to customers
a. Contains summary of all revenues and expenses for a period of time (fiscal
period)
b. Difference between revenues and expenses is called net income, profit or net
earnings
c. Format of the income statement
III. Statement of changes in owners’ equity
Contributed Capital + Retained Earnings
(additions + subtractions) + (Beg RE + Net Income – Dividends)
a. Shows changes that took place in owners’ equity during a period of time
b. Contributed capital (What owners contribute to the business)
i. Additions – additional investment
ii. Deductions – not covered in this course
c. Retained earnings (Earnings that are retained in the business)
i. End RE = Beg RE + Revenue – Expenses - Dividends
ii. Additions – net income
iii. Deductions – dividends
1. Dividends are assets that a company pays out to the owners of a
business
4. d. Statement of changes in owners’ equity is the bridge from the income statement
to the balance sheet (hybrid)
IV. Statement of cash flows
Operating + Investing + Financing
“O – I – F”
a. Shows all cash receipts and cash disbursements during a period of time
b. Cash from OPERATING activities
i. Inflows – cash received from customers
ii. Outflows – cash routinely paid to produce and sell goods and services
5. ACG2021
Chapter 5
Acquisitions: purchase and use of business assets
Acquisition of long-term assets: the business process (LO 1)
I. Long-term assets (fixed assets) are assets that will be used for more than one accounting
period (or typically stated, will last for greater than one year).
a. Tangible assets (can be seen and touched)
i. Land
ii. Factory buildings
iii. Machines
iv. Computers
v. Natural resources (minerals or timber)
b. Intangible assets (not visible or touchable)
i. Copyrights
ii. Patents
iii. Trademarks
iv. Franchises
v. Goodwill (The difference between what you pay and actual worth when
you purchase something for more than its book value)
Allocating the cost of long-term assets (LO 2)
I. Capitalizing a cost - means to record it on the balance sheet as an asset
II. The cost is later recognized as an expense in the periods in which the asset is used
a. Same as prepaid rent, prepaid insurance, etc.
6. III. Tangible Assets
a. Depreciation is a systematic, rational allocation process to recognize the expense
of long-term assets over the periods in which they are used
b. Depreciation expense is recorded as part of the adjusting process, before the
financial statements are prepared
c. The adjustment decreases the amount of the asset in the accounting records via
accumulated depreciation (a contra-asset) and decreases owners’ equity via
depreciation expense
d. Also referred to as “writing off” or “expensing” the cost of the asset
IV. Intangible Assets
a. Amortization refers to writing off an intangible asset (patent)
V. Natural Resources
a. Depletion refers to writing off a natural resource (timber)
b. Depreciation refers to writing off a tangible asset other than a natural resource
(equipment)
7. Example 1: (depletion example)
SML International owns an oil field with an estimated 10,000,000 barrels of oil
in it. The oil field was acquired at a cost of $25,000,000. In 2003, 1,000,000
barrels were produced and in 2004 1,750,000 barrels were produced.
How much depletion expense should be recorded in 2003 and 2004 based on
this information?
Step 1: Total Cost = Cost per Unit
Total # Expected Units
$25,000,000 = $2.50 per barrel
10,000,000 barrels
Step 2: Cost Per Unit x # of units extracted
(2003) $2.50 x 1,000,000 = $2,500,000 depletion expense
(2004) $2.50 x 1,750,000 = $4,375,000 depletion expense
Acquisition costs (LO 1&2)
I. Historical cost principle (Chapter 2) is used to record an asset at the amount paid for it
II. Equipment purchase includes
a. Purchase cost
b. Freight-in (cost to have the equipment delivered)
c. Insurance while in transit
d. Installation costs, including test runs
8. III. Building construction/acquisition includes
a. Architect’s or contractor’s fees
b. Construction costs
c. Costs of renovating or repairing the building
IV. When a cost is incurred there are two possible accounting treatments
a. Capitalize
i. Cost is recorded as an asset (becomes part of depreciable amount)
ii. Expense recognition is deferred
b. Expense
i. Cost is recorded as an expense
ii. Expense is recognized immediately
V. Special treatment for land
a. Land retains its usefulness and is not used up to produce revenue
b. Land cost is not amortized or depreciated
9. Example 2:
David Justice Company incurred the following expenditures related to the
purchase and use of a new building that will be used as the growing
company’s corporate headquarters and will be located in Reno, Nevada.
Expenditure Amount
Building materials (wood & brick) $560,000
Labor & labor related costs $256,000
Architect’s fee $78,000
Rental of equipment used in the construction $80,000
Annual utilities costs to operate the building (In use on $52,000
Feb 8)
Cost to fix a broken window (June 3) $90
Cost to clean a stained rug $230
Annual janitorial costs to keep the building clean $3,900
Determine the total costs that should be capitalized into the machine
account.
Includes everything that was used to complete the construction of the new
building. Once construction is complete, all other expenses are simply expenses
and should not be capitalized into the machine account.
Building Materials $560,000
Labor costs $256,000
Architect’s fee $78,000
Rental Equipment $80,000
$974,000
10. VI. Basket purchase allocation
a. Buying two assets for a single price (land and building)
b. Need to calculate separate cost for each asset
c. Relative fair market value method
ACG2021
CHAPTER 8
SPECIAL ACQUISITIONS: FINANCING A BUSINESS WITH DEBT
Long-term notes payable and mortgages
I. When a company borrows money for longer than one year, that obligation is called a
long-term note payable
a. Typically repaid with a series of equal payments over the life of the note
b. Each monthly payment includes interest and principal reduction
c. The amount of periodic interest expense declines over the life of the note, while
the amount of principal reduction increases
II. A mortgage is a special kind of note payable
a. Used for the specific purpose of purchasing property
b. Gives the lender a claim against that property if payments are not made
EXAMPLE #1
On June 1, 2005 Joe’s Jerk Shack bought a new building for a future restaurant at a sales
price of $100,000. They paid $35,000 cash and obtained a mortgage for the remainder of
the balance. Payments in the amount of $700 are to be made monthly. The first payment
will be made on June 30. The interest rate on the mortgage is 6%.
1. Show the entry for the purchase of the building on June 1.
2. What was interest expense for June? July?
3. What was the outstanding balance of the mortgage on June 30? July 31?
4. Show the journal entries for the June and July interest payments.
11. PxRxT
Beginning Interest Principal Ending
Principal Total Payment Expense Reduction Principal
$65000 x .06 x $700 - $325 $65000 -
$65,000 $700 (1/12) = $375 $375
June = $325 = $64,625
$64625 x .06 x $700 - $323 $64625 -
$64, 625 $700 (1/12) = $377 $377
July = $323 = $64,248
1. Show the entry for the purchase of the building on June 1.
Debit Credit
6/1 Building $100,000
Cash $35,000
Mortgage Payable $65,000
2. What was interest expense for June? July?
Using the above table:
June = $325
July = $323
3. What was the outstanding balance of the mortgage on June 30? July 31?
Using the above table:
June 30 = $64,625
July 31 = $64,248
4. Show the journal entries for the June and July interest payments.
Debit Credit
June Interest Expense $325
Mortgage Payable $375
Cash $700
July Interest Expense $323
Mortgage Payable $377
Cash $700
Long-term liabilities: Raising money by issuing bonds
I. What is a bond?
a. When firms need to borrow large amounts of money, they borrow it from the
general public
b. A bond is a written agreement that specifies the company’s responsibility to pay
interest and repay the principal to the bondholders
c. Bondholders are willing to lend money for a longer period of time than banks
12. d. Rate of interest on bonds is usually lower than the rate of interest on a bank loan
e. The issuance of bonds may involve disadvantages such as restrictions against
additional borrowing or requirements to maintain certain financial ratio levels
II. More about bonds
a. Bondholders are creditors of a company, not owners
b. Most bonds pay interest semiannually
c. Most bonds have a face value of $1,000
d. Bonds can be bought and sold in the secondary market
Issuing bonds payable
I. Getting the money
a. Bonds may be issued at
i. Par – equal to face value (Market Rate = Stated Rate)
ii. Premium – above face value (Stated Rate > Market Rate)
iii. Discount – below face value (Stated Rate < Market Rate)
b. Cash is increased
c. Bonds payable (a liability) is increased
II. Paying the bondholders
a. Interest is calculated as principal (face value) x interest rate x time
b. Every interest payment will be identical
i. Cash paid to the bondholder is determined by the terms of the bond
agreement
ii. Not affected by issue price
III. Issuing bonds at par, premium, or discount
a. Market rate of interest (what the investors are demanding) may not equal the
stated rate of interest (printed on the bond)
b. If market rate = stated rate, bonds sell at par
c. If market rate > stated rate, bonds will sell at a discount (below face amount)
d. If market rate < stated rate, bonds will sell at a premium (above face amount)