2331 Chapters 1&2 Lazer 2010 - Part 1 - Student - 6PP

2331 Chapters 1&2 Lazer 2010 - Part 1 - Student - 6PP -...

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Part 1 Page 1 Chapters 1 & 2 (Part 1): The Financial Statements & Transaction Analysis Dr. Ron Lazer First Quiz s Date: s Content: Notes – part 1 (specific instructions will be provided in class) s Allowed material: 4 function calculator Ron Lazer, Ph.D. 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 (General y Accepted Accounting Principles) The Accounting Information System Financial Statements Ron Lazer, Ph.D. Introduction: Financial Statements External financial statements include: s Balance Sheet s Income Statement s Statement of Stockholders’ Equity s Statement of Cash Flows Who are the users of above financial information? s Decision Makers Ron Lazer, Ph.D. Introduction: Financial Statements Primary external users are: b Current and potential investors b Creditors b Competitors b Regulatory agencies b Employees Ron Lazer, Ph.D.
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Part 1 Page 2 Development of GAAP - Generally Accepted Accounting Principles s Accounting standards used today are referred to as Generally Accepted Accounting Principles (GAAP) . s 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 s AICPA (American Institute of Certified Public Accountants): b Professional organization for public accountants. b Prepares the CPA examination. b AcSEC (Accounting Standards Executive Committee) issues SOPs (Statements of Position), Audit and Accounting Guidelines, Practice Bulletins. b Issued auditing standards (SASs), Attestation Standards, and Quality Control Standards. b Starting 2004, the PCAOB (Public Company Accounting Oversight Board) develops auditing standards for publicly traded companies. b The APB (Accounting Principles Board) issued opinions (Standards) until 1973. Ron Lazer, Ph.D. Development of GAAP: FASB s 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. Ron Lazer, Ph.D.
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This note was uploaded on 08/30/2010 for the course ACCT Acct 2331 taught by Professor Dr.ronlazer during the Fall '10 term at University of Houston.

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2331 Chapters 1&2 Lazer 2010 - Part 1 - Student - 6PP -...

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