Explain The Building Blocks Of Accounting
Slide 1-1
Chapter
1
Accounting in Action
Financial Accounting, IFRS Edition Weygandt Kimmel Kieso
Slide 1-2
Study Objectives
1. 2. 3. Explain what accounting is. Identify the users and uses of accounting. Understand why ethics is a fundamental business concept.
4.
5. 6. 7. 8.
Explain accounting standards and the measurement principles.
Explain the monetary unit assumption and the economic entity assumption. State the accounting equation, and define its components. Analyze the effects of business transactions on the accounting equation. Understand the four financial statements and how they are prepared.
Slide 1-3
Accounting in Action
What is Accounting?
The Building Blocks of Accounting
The Basic Accounting …show more content…
1. The three steps in the accounting process are identification, recording, and communication.
2. The two most common types of external users are investors and company officers.
True False True
3. Shareholders in a corporation enjoy limited legal liability as compared to partners in a partnership.
Slide 1-19
Solution on notes page
SO 5 Explain the monetary unit assumption and the economic entity assumption.
The Building Blocks of Accounting
Indicate whether each of the following statements presented below is true or false.
4. The primary accounting standard-setting body outside the United States is the International
True
Accounting Standards Board (IASB).
5. The cost principle dictates that companies record assets at their cost. In later periods, however, the fair value of the asset must be used if fair value is higher than its cost.
False
Slide 1-20
Solution on notes page
SO 5 Explain the monetary unit assumption and the economic entity assumption.
Slide 1-21
Answer on notes page
SO 5 Explain the monetary unit assumption and the economic entity …show more content…
Slide 1-55
SO 8 Understand the four financial statements and how they are prepared.
Understanding U.S. GAAP
Key Differences
Accounting in Action
In 2002, the U.S. Congress issued the Sarbanes-Oxley Act (SOX), which mandated certain internal controls for large public companies listed on U.S. exchanges. Debate about international companies (non-U.S.) adopting SOX-type standards centers on whether the benefits exceed the costs. The concern is that the higher costs of SOX compliance are making the U.S. securities markets less competitive. Financial frauds have occurred at companies such as Satyam
Computer Services (IND), Parmalat (ITA), and Royal Ahold (NLD). They have also occurred at large U.S. companies such as Enron, WorldCom, and AIG.
Slide 1-56
Understanding U.S. GAAP
Key Differences
Accounting in Action
IFRS tends to be less detailed in its accounting and disclosure requirements than GAAP. This difference in approach has resulted in a debate about the merits of “principles-based” (IFRS) versus “rules-based” (GAAP) standards. U.S. regulators have recently eliminated the need for foreign companies that trade shares in U.S. markets to reconcile their accounting with GAAP. GAAP is based on a conceptual framework that is similar to that used to develop
Chapter
1
Accounting in Action
Financial Accounting, IFRS Edition Weygandt Kimmel Kieso
Slide 1-2
Study Objectives
1. 2. 3. Explain what accounting is. Identify the users and uses of accounting. Understand why ethics is a fundamental business concept.
4.
5. 6. 7. 8.
Explain accounting standards and the measurement principles.
Explain the monetary unit assumption and the economic entity assumption. State the accounting equation, and define its components. Analyze the effects of business transactions on the accounting equation. Understand the four financial statements and how they are prepared.
Slide 1-3
Accounting in Action
What is Accounting?
The Building Blocks of Accounting
The Basic Accounting …show more content…
1. The three steps in the accounting process are identification, recording, and communication.
2. The two most common types of external users are investors and company officers.
True False True
3. Shareholders in a corporation enjoy limited legal liability as compared to partners in a partnership.
Slide 1-19
Solution on notes page
SO 5 Explain the monetary unit assumption and the economic entity assumption.
The Building Blocks of Accounting
Indicate whether each of the following statements presented below is true or false.
4. The primary accounting standard-setting body outside the United States is the International
True
Accounting Standards Board (IASB).
5. The cost principle dictates that companies record assets at their cost. In later periods, however, the fair value of the asset must be used if fair value is higher than its cost.
False
Slide 1-20
Solution on notes page
SO 5 Explain the monetary unit assumption and the economic entity assumption.
Slide 1-21
Answer on notes page
SO 5 Explain the monetary unit assumption and the economic entity …show more content…
Slide 1-55
SO 8 Understand the four financial statements and how they are prepared.
Understanding U.S. GAAP
Key Differences
Accounting in Action
In 2002, the U.S. Congress issued the Sarbanes-Oxley Act (SOX), which mandated certain internal controls for large public companies listed on U.S. exchanges. Debate about international companies (non-U.S.) adopting SOX-type standards centers on whether the benefits exceed the costs. The concern is that the higher costs of SOX compliance are making the U.S. securities markets less competitive. Financial frauds have occurred at companies such as Satyam
Computer Services (IND), Parmalat (ITA), and Royal Ahold (NLD). They have also occurred at large U.S. companies such as Enron, WorldCom, and AIG.
Slide 1-56
Understanding U.S. GAAP
Key Differences
Accounting in Action
IFRS tends to be less detailed in its accounting and disclosure requirements than GAAP. This difference in approach has resulted in a debate about the merits of “principles-based” (IFRS) versus “rules-based” (GAAP) standards. U.S. regulators have recently eliminated the need for foreign companies that trade shares in U.S. markets to reconcile their accounting with GAAP. GAAP is based on a conceptual framework that is similar to that used to develop