Professional Documents
Culture Documents
Date:
Day:
Time:
Venue:
13 January 2015
Tuesday
0830 to 1030 hrs
LT24 (South Spine)
Course Assessment
(1) Class participation (I):
(2) Team Project (T)
(3) In-class quiz (I)
(4) Team presentation (I,T)
(5) Final Examination ** (I)
TOTAL
10%
20%
10%
10%
50%
100%
To ____________
(i.e. to make
themselves
better off)
Corporation
Personal
Proprietor is
General
liability of
personally liable partners are
owner(s) for
personally
business
liable; limited
debts
partners are
not
Shareholders
are NOT
personally
liable
Lects 9- 10
Debt/
Equity
Intangible
assets
Operating
Activities
Investing
Activities
Lect
Re
ge v e
ne nu
pr ra e
oc tin
es g
s
s
e
v
4-
tm
In
h Lect 11
s
a
C
s
w
flo
s
t
n
n
isitio
Acqu ayment
p
and oods
for g ices
serv
and
Le
cts
Lects 7 - 8
Lect 12
F/S
Analysis
PP
Financing
Activities
Business Processes
Financing
Activities
Cash received
by borrowing
money from
banks or
through issue of
bonds
(liabilities)
Cash received
by issuing
stock/shares to
investors
It
Takes
MONEY
to
Make
MONEY!
Investing
Activities
Examples of assets .....
Activities
Cash
involving
Accounts
the
Receivable
purchase or
sale of
Inventory
resources or Buildings,
assets
Equipment,
Delivery Vans,
used in the
Furniture
business
operations
9
Operating
Activities
are the main activities for which
the organization is in business.
10
Investing
Activities
Operating
Activities
$ Profits$
r
o
f g
h tin
s
a es
C v
in
Cash from owners and
creditors to purchase
long-lived assets
Cash for
owners and
creditors
Financing
Activities
11
Financial
information
Managerial
information
13
Financial
information
14
Financial information
15
Objective of general-purpose
financial reporting
To
provide
financial
____________
about
the
reporting
entity
that
is
______
to
existing
and
potential
_________,
_________
and
other
_________
in
making
decisions
about
providing
resources
to
the
entity
Ref: The Conceptual Framework for Financial Reporting
17
Measurement and
recording system
18
What Is Measured?
Business transactions
as
the
object
of
measurement.
Business transactions
are
economic events
that
affect
the
financial
position
of
a
business
entity.
19
Source Documents
Purchase
Invoice
Cash
Register
Tape
Payroll
Records
Evidence needed
in an accounting
system to record
transactions
Shipping
Document
Sales
Invoice
Cheques
Receiving
Document
20
Outputs of the
measurement process system
The Financial Statements
1. Statement of Profit or Loss and
Other Comprehensive Income
2.
Statement of Financial Position
(Balance Sheet)
3. Statement of Changes in Equity
4. Statement of Cash Flows
5. Notes to the Financial
Statements
21
Recording
System
Economic events are the basis for recording
transactions in an accounting system.
For every transaction, it is essential to analyze
its effect on the accounting equation:-
A = L + OE
22
Accounting
Equation
A = L + OE
Assets
Future
economic
benefits
Liabilities
Equity
A=
Assets
Cash
Accounts Receivable
Prepaid Insurance / Prepaid Rent
Office supplies
Inventory
Intangible assets copyrights,
patents
Buildings, Equipment, Delivery
Vans, Furniture
24
L=
Liabilities
Accounts payable
Interest payable
Salaries payable
Notes payable
Unearned service fees
25
E=
Equity
A = L + E
E
=
26
Assets
$90,000
Liabilities
$20,000
Equity
$70,000
Copyright 2014 Pearson Education
19
28
29
Assets
$90,000
Liabilities
$20,000
Copyright 2014 Pearson Education
Equity
$70,000
19
31
Expansion of Equity
Liabilities
Assets
Equity
Copyright
2015
Clement
Tan
32
Total
Revenue
Total
Expenses
Gains/
(losses)
Net
Income
(or Loss)
33
+
Total Comprehensive income34
Copyright
2015
Clement
Tan
35
36
\
Net Income
(or Loss)
Ending
Retained
Earnings
Beginning
Retained
Earnings
37
The
Components
of
the
Retained
Earnings
and
the
Accounting
Equation
38
39
Copyright
2015
Clement
Tan
A= L + E
The
accounting
equation
must
remain
in
balance
after
each
transaction.
41
Transaction Analysis
1
A= L + E
* Also known as Common Stock or Contributed Capital
42
Transaction Analysis
2
A= L + E
43
Transaction Analysis
3
A= L + E
44
Transaction Analysis
4
A= L + E
45
Transaction Analysis
5
A= L + E
46
Transaction Analysis
6
A= L + E
47
Transaction Analysis
7
A= L + E
48
Transaction Analysis
8
A= L + E
49
Transaction Analysis
9
A= L + E
50
Transaction Analysis
10
A= L + E
51
Transaction Analysis
11
A= L + E
52
Transaction Analysis
12
A= L + E
53
Transaction Analysis
13
A= L + E
54
Transaction Analysis
14
A= L + E
55
LIABILITIES
+ $10,000
NET INCOME
+ $1,500
+ $ 3,430
+ $2,600
- $1,000
+$1,000
+ $ 70
- $1,000
$16,600
OWNERS EQUITY
+$4,170
+$3,170
+ $1,400
- $ 600
+ $1,000
+ $2,800
- $ 100
- $ 70
- $1,000 Dividend
56
+$13,430
+$12,430
REVIEW
Business and value creation.
Relationship among business
processes
Accounting as The Language of
Business
Types of Accounting information
Conceptual Framework of Accounting
Accounting Equation
Expanded Accounting Equation
Framework
57
REVIEW
Note that the accounting equation
ALWAYS remains in balance after
each transaction.
A= L + E
58
59
Copyright
2015
Clement
Tan