Distributed Principles of Accounting Outline (Fall 2015) -...

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I.►Introduction to Accounting (CH 1)A.►What Is Accounting?1.►Consists of three basic activitiesa)Identifying economic events which are relevant to the businessb)►Recording those events through systematic procedures(1) Includes bookkeepingc)►Communicating the information to interested parties(1) ►Who are interested parties?(a) Internal users(i)Officers/directors and managers(b) External users(i) Owners/shareholders(ii)Creditors (e.g., banks)(iii) Labor unions(iv)Government authorities (e.g., IRS)B.►What Are Ethics?1.Ethics are a branch of philosophy dealing with moral principles and valuesgoverning human conduct2.►Why are ethics important in accounting?C.►What Are Generally Accepted Accounting Principles?
(a) ►WHY use original cost instead of market value?
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Chapter 4 / Exercise 3
College Accounting, Chapters 1-27
Heintz/Parry
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1.►Classified balance sheeta) ►PURPOSE:(1) Reports assets, liabilities and stockholders’ equity of abusiness as of a specific date(2) ►EXAMPLE: As of May 31, 2015(a) FORMAT: Assets first, then liabilities, then stockholders’equity(b) FORMULA: Assets MUST equal liabilities plusstockholders’ equity(3) ►Assets MUST equal liabilities plus stockholders’ equity(4) ►Standard classificationsb) ►Assets:(1) ►What are assets?(a) ►All the resources owned by a business which willprovide some future service or benefit(i)EXAMPLES: Cash, accounts receivable,inventory, fixed assets(2) ►Current assets(a) ►Assets a company expects to convert to cash or useup within 1 year(b) ►Categories:(i) Cash(ii)Short-term investments(iii) Receivables(iv)Inventories(v) Prepaid expenses(3) ►Long-term investments(a) ►Investments in stocks and bonds of other companiesheld for greater than 1 year(4) ►Property, plant and equipment (aka fixed assets)(a) ►Assets with a long useful life(b) ►Categories:(i) Land(ii) Buildings(iii) Machinery and equipment(iv)Vehicles(v) Furniture(c) ►REMEMBER: includes accumulated depreciation(contra-asset account)(i)Reflects the depreciation the company has

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Term
Winter
Professor
TIAN
Tags
Balance Sheet, Generally Accepted Accounting Principles, CR Cash
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
College Accounting, Chapters 1-27
The document you are viewing contains questions related to this textbook.
Chapter 4 / Exercise 3
College Accounting, Chapters 1-27
Heintz/Parry
Expert Verified

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