財務會計 第一章the financial statements

1、Copyright 2010 Pearson Education CanadaThe Financial StatementsChapter 11Copyright 2010 Pearson Education CanadaLearning Objective 1Use accounting vocabulary.2Copyright 2010 Pearson Education CanadaAccounting LanguageAccounting is an information system that:Measures business activitiesProcess data i

2、nto reports (financial statements)Communicates results to decision makers3Copyright 2010 Pearson Education CanadaAccounting LanguageFinancial Statements:Financial information about a business entity that is prepared in a systematic report format that can be used by decision makers to make decisionsI

3、ncomeStatementBalanceSheetStatement ofCash Flow4Copyright 2010 Pearson Education CanadaThe Flow of Accounting Information3. Businesses report their results.2. Business transactions occur.1. People make decisions.5Copyright 2010 Pearson Education CanadaIndividualsUsers of Financial StatementsInvestor

4、s andcreditorsGovernmentregulatoryagenciesNon-profitorganizationsTax Authorities6Copyright 2010 Pearson Education CanadaFinancial AccountingSummarize business transactions of business entity for a specified periodUsers External decision makersInformation must: Be presented in systematic reports meet

5、 GAAP standards for relevance and reliability 7Copyright 2010 Pearson Education CanadaManagement AccountingFinancial and operating data about an organizations activities, processes, operating units products services and customersUsers - internal decision makersInformation - can generated using assum

6、ptions- Future oriented - not governed by GAAP8Copyright 2010 Pearson Education CanadaEthics in AccountingInformation must be:1. RelevantInformation has predictiveor feedback valueCan influence a decisionTimely2. ReliableInformation is verifiableInformation must be objective9Copyright 2010 Pearson E

7、ducation CanadaEthics in AccountingIntegrity is built in financial accounting as follows:Generally accepted accounting principles (GAAP)Audits of financial statementsSecurities commissionsInternal Control StructureAccounting Standards Board of the Canadian Institute of Chartered Accountants10Copyrig

8、ht 2010 Pearson Education CanadaEthics in Accounting and BusinessStandards of professional conduct for accountantsSelf-regulating bodies of accountantsCICACGAACSMAC11Copyright 2010 Pearson Education CanadaProprietorshipsPartnershipsCorporationsHow to Organize a Business12Copyright 2010 Pearson Educa

9、tion CanadaCorporationsStocksShareholdersCanadian Business Corporation ActBoard ofDirectorsChief Operating Officers, Presidents,Managers13Copyright 2010 Pearson Education CanadaHow to Do Accounting:Principles and ConceptsThe rules that govern accounting are called GAAP(generally accepted accounting

10、principles).Accountants follow professional guidelines.14Copyright 2010 Pearson Education CanadaGAAPCICA Handbook: official source of GAAP;sanctioned by federal and provincial governments and the Canadian Securities AdministratorsAccounting Standards Board (AcSB) Public Sector Accounting Standards B

11、oard Emerging Issues Committee (EIC) International Accounting Standards Board (IASB)15Copyright 2010 Pearson Education CanadaInternational Accounting Standards Board (IASB)IASB is charged with setting International Financial Reporting Standards (IFRSs)Canadian GAAP will converge with IFRSs1st year f

12、or reporting under IFRS-based standards will be 201116Copyright 2010 Pearson Education CanadaLearning Objective 2Learnaccounting conceptsand principles.17Copyright 2010 Pearson Education CanadaConceptual Framework Information must be useful for decision makersRelevanceReliabilityComparabilityUnderst

13、andabilityGAAP18Copyright 2010 Pearson Education CanadaGAAP Requirements for Financial InformationGAAP requires:business entity conceptcost principlegoing concern assumptionobjectivity principleadequate disclosurestable dollar assumption19Copyright 2010 Pearson Education CanadaThe Business Entity Co

14、nceptAn accounting entity is anorganization that stands apartas a separate economic unit.20Copyright 2010 Pearson Education CanadaAssets and services acquiredshould be recorded at theiractual (historical) cost.The Cost Principle21Copyright 2010 Pearson Education CanadaThe Going-Concern ConceptThe en

15、tity will continueto operate in the foreseeable future.22Copyright 2010 Pearson Education Canada(1)are verifiable and(2)can be confirmed by anindependent observer.The Objectivity Principle23Copyright 2010 Pearson Education CanadaAdequate DisclosureFinancial statements should be accompanied by any in

16、formation necessary for the statements to be interpreted properly.24Copyright 2010 Pearson Education CanadaThe Stable-Monetary-Unit ConceptThe dollars purchasingpower is relatively stable.25Copyright 2010 Pearson Education CanadaLearning Objective 3Apply the accounting equation to business organizat

17、ions. 26Copyright 2010 Pearson Education CanadaThe Accounting Equation27Copyright 2010 Pearson Education CanadaThe Accounting EquationAssetsOwnersEquityLiabilitiesAssets = Liabilities + Owners Equity28Copyright 2010 Pearson Education CanadaThe Accounting EquationAssets are the economic resourcesof a

18、 business that are expected toproduce a benefit in the future.Liabilities are “outsider claims”or economic obligationspayable to outsiders.Owners equity represents the“insider claims” of a business.29Copyright 2010 Pearson Education CanadaThe Accounting EquationFor a corporation, shareholders equity

19、is divided into two main categories.Contributed capitalRetained earningsAssets = Liabilities + Shareholders equityAssets = Liabilities + Contributed capital + Retained earnings30Copyright 2010 Pearson Education CanadaThe Accounting EquationContributed capital is the amount investedin the corporation

20、 by its owners.The basic component of contributedcapital is common shares.Retained earnings is the amount earnedby income-producing activities andkept for use in the business.31Copyright 2010 Pearson Education CanadaThe Accounting Equation: Net incomeRevenues are increases in retainedearnings from d

21、elivering goodsor services to customers.Expenses are decreases in retainedearnings that result from operations.32Copyright 2010 Pearson Education CanadaComponents of Retained EarningsRevenues forthe periodExpenses forthe period=Net income(or Net loss)for theperiodDividendsfor theperiodEndingbalance

22、ofretainedearningsEnd ofthe periodStart ofthe periodBeginningbalance ofretainedearnings+or=33Copyright 2010 Pearson Education CanadaLearning Objective 4Evaluate business operations.34Copyright 2010 Pearson Education CanadaThe Financial StatementsThe financial statements are a pictureof the company i

23、n financial terms.Each financial statement relates to a specificdate or covers a particular period.35Copyright 2010 Pearson Education CanadaInformation Reported on the Financial Statements1. How well did the company perform (or operate) during the period? Revenues Expenses Net income (Net loss)Incom

24、estatementQuestionAnswerFinancialStatement2. Why did the companys retained earnings change during the period?Beginning Retained Earnings+ Net income (or Net loss)- Dividends= Ending R.E.Statement of Retained Earnings36Copyright 2010 Pearson Education CanadaInformation Reported on the Financial State

25、ments3. What is the companys financial position at the end of the period? Assets= Liabilities+ Owners equityBalancesheetQuestionAnswerFinancialStatement4. How much cash did the company generate and spend during the period? Operating cash flows Investing cash flows Financing cash flowsIncrease or dec

26、rease in cashCashflowstatement37Copyright 2010 Pearson Education CanadaThe Balance Sheet:Measuring Operating PerformanceThe balance sheet or statement of financial position reports the companys assets, liabilities and owners equityas of a specific date.38Copyright 2010 Pearson Education CanadaThe In

27、come Statement:Measuring Operating PerformanceThe income statement, statement ofoperations, or statement of earnings reports the companys revenues,expenses, and net incomeor net loss for the period.39Copyright 2010 Pearson Education CanadaThe Cash Flow StatementThe cash flow statement reportsthe com

28、panys cash inflows andoutflows from operating, investing,and financing activities.40Copyright 2010 Pearson Education CanadaLearning Objective 5Use financial statements.41Copyright 2010 Pearson Education CanadaRelationships Among the Financial StatementsIncome Statement Net IncomeStatement of Retaine

29、d Earnings- Add net incomeBalance Sheet - Report retained earnings Cash Flow Statement - Report cash balance from balance sheet42Copyright 2010 Pearson Education CanadaStarting a Business Example: Hot Dog Vendor Owner(s) provide the funds These funds are used by the managers of the company to buyEquipmentInventoryOther Assets43Copyright 2010 Pearson Education CanadaHotdog BusinessDetermine Business Structure:- proprietorship- partnership- corporation44Copyright 2010 Pearson Education CanadaHotdog BusinessAdmi