Chapter 2 - Chapter 2: Basic Accounting Concepts Basic...

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Chapter 2: Basic Accounting Concepts
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Basic Elements of a Financial Accounting System Set of rules to record economic events. Framework to prepare financial statements. Controls to detect errors.
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Rules Derived from the eight concepts discussed in Chapter 1. Generally Accepted Accounting Principles are described and illustrated throughout the text.
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Framework An integrated financial statement approach is used for analyzing, recording, and summarizing transactions by expanding the accounting equation. Integrates the accounting equation with the Income Statement and Statement of Cash Flows.
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Controls The integrated financial statement approach has built-in controls to make sure that transactions are recorded correctly.
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Basic Accounting Equation Assets = Liabilities + Stockholders’ Equity
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Starting Family Health Care, P.C. Dr. Landry invests $6,000 to start a practice.
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Chapter 2 - Chapter 2: Basic Accounting Concepts Basic...

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