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Chapter 1 - Chapters 1 2(Part 1 The Financial Statements...

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Chapters 1 & 2 (Part 1): The Financial Statements & Transaction Analysis Dr. Ron Lazer Fall 2009 Reminder - First Quiz square6 Date: Thursday, September 3 rd , 2009 square6 Content: Notes – part 1 (specific instructions will be provided in class) square6 Allowed material: 4 function calculator Ron Lazer, Ph.D.
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Class Case On 1/1/2009 Dan decided to start his own airport shuttle business. On the same day he bought a used van for $5,500 , paid $2,000 for annual registration, taxes and permits and started to drive passengers from & to the airport. By 1/31/2009, Dan serviced over 300 (happy?) passengers and collected a total of $8,000 . Some passengers still owe Dan a total of $500 for their trips. Dan paid $4,500 for miscellaneous costs and still owes $1,200 on his credit card for additional expenses. By the end of the month Dan experienced trouble with the van and scheduled to bring it in for repairs on 2/1/2009. He expects to pay about $1,000 for the repairs. What was Dan’s gain or loss for the month of January 2009? Ron Lazer, Ph.D. Financial Accounting GAAP (Generally Accepted Accounting Principles) The Accounting Information System Financial Statements Ron Lazer, Ph.D.
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Introduction: Financial Statements External financial statements include: square6 Balance Sheet square6 Income Statement square6 Statement of Stockholders’ Equity square6 Statement of Cash Flows Who are the users of above financial information? square6 Decision Makers Ron Lazer, Ph.D. Introduction: Financial Statements Primary external users are: box2 Current and potential investors box2 Creditors box2 Competitors box2 Regulatory agencies box2 Employees Ron Lazer, Ph.D.
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Development of GAAP - Generally Accepted Accounting Principles square6 Accounting standards used today are referred to as Generally Accepted Accounting Principles (GAAP) . square6 These principles are "generally accepted" because an authoritative body has set them or the accounting profession widely accepts them as appropriate. Ron Lazer, Ph.D. Development of GAAP: AICPA square6 AICPA (American Institute of Certified Public Accountants): box2 Professional organization for public accountants. box2 Prepares the CPA examination. box2 AcSEC (Accounting Standards Executive Committee) issues SOPs (Statements of Position), Audit and Accounting Guidelines, Practice Bulletins. box2 Issued auditing standards (SASs), Attestation Standards, and Quality Control Standards. box2 Starting 2004, the PCAOB (Public Company Accounting Oversight Board) develops auditing standards for publicly traded companies. box2 The APB (Accounting Principles Board) issued opinions (Standards) until 1973. Ron Lazer, Ph.D.
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Development of GAAP: FASB square6 The mission of the Financial Accounting Standards Board (FASB) is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.
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