2331 Chapter 01 MRN ACCT2331

2331 Chapter 01 MRN ACCT2331 - Chapter 1: Accounting:...

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Chapter 1: Accounting: Concepts, Standards and Practice
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Class Case On 1/1/2005 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 1/31/2005, 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 repair on 2/1/2005. He expects to pay about $1,000 for the repairs. What was Dan’s gain or loss for the month of January 2005?
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Financial Accounting – Big Picture GAAP (Generally Accepted Accounting Principles) The Accounting Information System Financial Statements Conceptual framework Parties involved in Standard Setting
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GAAP Parties involved in Standard Setting Conceptual framework Objectives Fundamental Concepts Recognition and Measurement Concepts AICPA FASB IASB SEC Assumptions Principles Constraints Today’s Class Objectives
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Introduction: Financial Statements External financial statements include: Balance Sheet (also called Statement of Financial Position) Income Statement Statement of Stockholders’ Equity (alternatives: Statement of Owners’ Equity) Statement of Cash Flows
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Introduction: Financial Statements Primary external users are: Current and potential investors Creditors Competitors Regulatory agencies Employees
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Development of GAAP - Generally Accepted Accounting Principles Accounting standards used today are referred to as Generally Accepted Accounting Principles (GAAP) . These principles are "generally accepted" because an authoritative body has set them or the accounting profession widely accepts them as appropriate.
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Development of GAAP: AICPA AICPA (American Institute of Certified Public Accountants): Professional organization for public accountants. Prepares the CPA examination. AcSEC (Accounting Standards Executive Committee) issues SOPs (Statements of Position), Audit and Accounting Guidelines, Practice Bulletins. Issues auditing standards (SASs), Attestation Standards, and Quality Control Standards. Starting 2004, the PCAOB (Public Company Accounting Oversight Board) develops auditing standards for publicly traded companies.
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This note was uploaded on 12/01/2011 for the course ACCOUNTING 2331 taught by Professor Milbrath during the Spring '11 term at University of Houston.

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2331 Chapter 01 MRN ACCT2331 - Chapter 1: Accounting:...

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