BUSI 101

BUSI 101 - BUSI 101 Father of Accounting (double entry book...

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BUSI 101 Father of Accounting (double entry book keeping)—Luca Pacioli (1494) Accounting is the backbone of any business major in college. Likes having liquid assets Financial Accounting—“external” The conveyance of financial information to external parties so that they can make good decisions Managerial—“internal” Less regulated Forms: Proprietorship—single person, unlimited liability, must pay taxes on their own tax return Partnership—two or more people, unlimited liability, file a 1065 an information return “C” Corporation—limited liability (the most you lose is what you put in) in section see of the revenue code, two pieces make up owner’s equity: contributed capital and retained earnings (accumulated net income in excess of dividends), double taxes, unlimited number of stock holders Limited Partnership—one partner is general partner, others are limited (can only lose what they invested) “S” Corporation—less than 100 stock holders, file an information return LLC—choice of whether or not to file corporate taxes Balance Sheet—a snapshot of a company at a specific point in time A (assets) = L (liabilities) + OE (owner’s equity) Real or Permanent Accounts: whatever the ending balance is one year will be the beginning balance the next o A = economic resources (permanent) All public companies have to files a 10k ( www.sec.gov ) Ex: cash, accounts receivable, inventory, land/buildings, equipment, intellectual property, goodwill o L = creditor’s claims (permanent) Ex: accounts payable, notes payable, taxes payable, salaries payable, unearned fees/rent, bonds payable o OE = owner’s claims (permanent) Income Statement—period of time (shown first if it was a successful year) aka consolidated statement of earnings NI (net income) = R (revenues) – E (expenses) Nominal or Temporary Accounts: close them at the end of each year o R = increase/inflow in “net assets” from providing goods/services (temporary)
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Recorded if A increase or if L decrease Ex: sales rev, interest rev, rent rev, dues rev, gain o E = decrease/outflow in “net” assets” from providing goods/services (temporary) Recorded if A decrease or L increase Ex: cost of goods sold, depreciation expense, rent expense, interest expense, loss o Net Assets = total assets – total liabilities = owner’s equity
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BUSI 101 - BUSI 101 Father of Accounting (double entry book...

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