What is accounting

What is accounting - Hysterical cost principle –value...

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Accounting 101 Jan. 15th What is accounting? An information system that: analyzes, records, communicates financial results for an enterprise for interest parties such as: -internal users: those people inside the organization -external users: those people outside the organiztion Form of presentation -financial statements -income statement -retained statements -balance sheets -statement of cash flows --FASB Financial Statement Board (makes the rules that govern the statement board) rules of accounting are prepared by the FASB -SEC Security and Exchange Commission Net income (loss) Corporation –SHE (stock holders’ equity) -owned by everyone (stocks) -SP Sale Proprietorship: -assets, liabilities, capital Entity is separate from partners and owners Entity assumption Monetary assumption –assets, liabilities, ect. must be measured in some sort of currency
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Unformatted text preview: Hysterical cost principle –value must be maintained Account receivable –what someone owes you Liabilities –what someone owes someone else Accounting Equation Assets = Liabilities + SHE Stock holders equity (Equities) I.e. 20,000 = 5,000 + 15,000 Assets: cash, auto, inventory, account receivable, supplies, land, building, equipment Liabilities: account payables, unearned revenues, wages payable, rent, bills SHE: common stock, additional paid-in capital, revenues, expenses, dividends Effect of transactions on the accounting equation When an asset decreases then:-another asset increases-a liability decreases-SHE decreases When an asset increases:-another asset decreases-a liability increases-SHE increases...
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This note was uploaded on 06/17/2008 for the course ACCT 101 taught by Professor Iforget during the Spring '08 term at Philadelphia.

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