Definition of accounting
PPT 2 -CH4 broad groupings of financial statements elements Assets Liabilities Owners’ equity Revenue Expenses
The term debit refers to a journal entry to the left side of a general ledger account
The term credit refers to a journal entry to the right side of a general ledger account
Accounting System Flow
1. Transactions are recorded in the form of journal entries and adjusting entries
2. Journal entries are posted into the accounts of the general ledger
3. The trial balance is prepared by listing account balances
4. The financial statements are prepared
PPT 3 -CH2
GAAP – generally accepted accounting principles
FASB – The Financial Accounting Standard Board
Money is the common unit of measure to record the value of economic transactions
A transaction is recorded only of events that can be expressed in monetary terms
Non-monetary assets – acquisition cost continues to be the cost basis for all subsequent accounting for the asset
Monetary assets – subsequent to acquisition, they are accounted at their fair value
Assets
Cash & equivalent – funds available for disbursement
Marketable securities – readily convertible into cash
Accounts receivable – amounts owed to the entity by its customers
Inventories – items that are held for sale (finished) or in process of production (work-in-process)
Prepaid expenses - assets of an intangible nature, whose usefulness will expire in the near future
Property, Plant and equipment – Tangible (Fixed) Assets acquired to produce goods and services that will generate future cash flows
Other Assets
Investments – securities issued by another company
Intangible assets – goodwill, patents, trademarks, copy-wrights
Liabilities are obligations to outside parties for events that have already happened – goods or services already received
Current Liabilities - expected to be satisfied or extinguished during the normal operating cycle or within a year
Non Current (other)
The term debit refers to a journal entry to the left side of a general ledger account
The term credit refers to a journal entry to the right side of a general ledger account
Accounting System Flow
1. Transactions are recorded in the form of journal entries and adjusting entries
2. Journal entries are posted into the accounts of the general ledger
3. The trial balance is prepared by listing account balances
4. The financial statements are prepared
PPT 3 -CH2
GAAP – generally accepted accounting principles
FASB – The Financial Accounting Standard Board
Money is the common unit of measure to record the value of economic transactions
A transaction is recorded only of events that can be expressed in monetary terms
Non-monetary assets – acquisition cost continues to be the cost basis for all subsequent accounting for the asset
Monetary assets – subsequent to acquisition, they are accounted at their fair value
Assets
Cash & equivalent – funds available for disbursement
Marketable securities – readily convertible into cash
Accounts receivable – amounts owed to the entity by its customers
Inventories – items that are held for sale (finished) or in process of production (work-in-process)
Prepaid expenses - assets of an intangible nature, whose usefulness will expire in the near future
Property, Plant and equipment – Tangible (Fixed) Assets acquired to produce goods and services that will generate future cash flows
Other Assets
Investments – securities issued by another company
Intangible assets – goodwill, patents, trademarks, copy-wrights
Liabilities are obligations to outside parties for events that have already happened – goods or services already received
Current Liabilities - expected to be satisfied or extinguished during the normal operating cycle or within a year
Non Current (other)