Lecture 1 the financial statements

Lecture 1 the financial statements - Lecture 1 Financial...

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Financial Statements Lecture 1
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Learning Contents Accounting is the language of business Types of organizing a business GAAP conceptual framework Basic financial statement 1.Balance sheet 2.Income statement 3.Retained earnings statement 4.Cash flow statement
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Learning Objective Learning Objective LO1 Explain why accounting is the language of business
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The Language of Business P3 The Language of Business P3 Measures business activities Processes data into reports Communicates results Produces financial statements
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Flow of Accounting Information Flow of Accounting Information
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Users of Accounting Information P4 Users of Accounting Information P4
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Learning Objective Learning Objective LO2 Understand the types of organizing business
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Organizing a Business P6 Organizing a Business P6 Types of organizing business Proprietorship 个人独资制企业 Partnership 合伙制企业 L imited L iability C ompany (LLC) 有限责任公司制企业 Corporation 股份公司制企业
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P6 Proprietorship 个人独资企业 P6 Single owner Common business form for small retail stores and professional service providers Proprietor personally liable for business debts
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P6 Partnership 合伙企业 P6 Two or more parties as co-owners Not a taxpaying entity Income passes through to partners Governed by an agreement Unlimited liability Involve risk Limited liability partnerships (LLP 有限责任合伙 企业 ) lessen risk
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P7 Limited-Liability Company (LLC) 有限责任公司 P7 One or many owners (members) Limited liability Like a partnership, not a taxpaying entity Income flows through to members Popular form of business due to combination of tax status and limited liability
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P7 Corporations 股份公司 P7 Owned by stockholders Stock represents share of ownership Ability to raise large sums of capital Larger than proprietorship and partnerships Formed under state law Legally distinct from its owners
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Corporations Corporations Double taxation Corporate income is taxed Shareholders taxed on distributions of earnings (dividends) Stockholders elect Board of Directors Set policy and appoint officers
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organization Summary the types of business organization Proprietorship Partnership LLC Corporation Owner(s) Proprietor -One Partners – two or more Members Stockholders – usually many Personal liability of owner(s) for business debts Proprietor is personally liable Partners are personally liable; limited partners are not Members are NOT personally liable Stockholders are NOT personally liable
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Quick check 1: paying entity? Quick check 1: Which business form offers limited liability to its owners but is not a tax- paying entity?
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