《西方财务会计》课件.ppt

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1、Chapter 2 Basic Financial StatementsIntroduction to Financial StatementsIncome StatementBalance SheetStatement of Cash FlowsThree primary financial statements.We will use a corporation to describe these statements.Introduction to Financial StatementsDescribes where the enterprise stands at a specifi

2、c date.Income StatementBalance SheetStatement of Cash FlowsIntroduction to Financial StatementsDepicts the revenue and expenses for a designated period of time.Income StatementBalance SheetStatement of Cash FlowsIntroduction to Financial StatementsDepicts the ways cash has changed during a designate

3、d period of time.Income StatementBalance SheetStatement of Cash FlowsA Starting Point:Statement of Financial PositionHeading(p39)Body(p39)AssetsAssets are economic resources that are owned by the business and are expected to benefit future operations.AssetsResourcesAssetsGenerate Positive Cash Flows

4、(Cash Inflows)Directly converted into cash(collection of receivables)Indirectly used in operating the business to create other assets that result in positive cash flows(used to produce the products for sale)Tangible(have physical existence)Intangible(like in the form of valuable rights)A summary of

5、p40AssetsCost PrincipleCost PrincipleGoing-ConcernGoing-ConcernAssumptionAssumptionObjectivity Objectivity PrinciplePrincipleStable-DollarStable-DollarAssumptionAssumptionThese accounting principles support cost as the basis for asset valuation.LiabilitiesLiabilities are debts that represent negativ

6、e future cash flows for the enterprise.Owners EquityOwners equity represents the owners claims on the assets of the business.Owners EquityChanges in Owners EquityOwners InvestmentsBusiness EarningsPayments to OwnersBusiness LossesThe Accounting EquationThe accounting equation displays that all asset

7、s are either financed by borrowing money or paying with the money of the companys stockholders.Assets=Liabilities+Owners EquityWhat things the business ownsWho supplied these resources to the business and how much each group suppliedThe Accounting Equation Assets =Liabilities +Owners Equity$300,000

8、=$80,000 +$220,000P41 Your TurnWould there be any different motivation when you report the value of your home to the city assessor,when comparing with when reporting to the potential buyers?Overnight Auto Service p44Business entity:Overnight Auto ServiceAccounting policies:Prepare formal financial s

9、tatementsOn Jan 21,McBryan and his family invested$8,000 in Overnight Auto Service and received 800 shares of stock.On Jan 20,Overnight Auto Service purchased the land for$52 000 cash.On Jan 22,Overnight purchased the abandoned bus garage for$36 000.Overnight made a cash down payment of$6 000 and is

10、sued a 90-day non-interest bearing note payable for the$30 000 balance owned.Purchase on account:a deferral of paymentsInstallment paymentOn Jan 23,Overnight purchased tools and automotive repair equipment on account.The purchase was$13,800,due within 60 days.On Jan 24,Overnight sold the excess tool

11、s for$1,800,a price equal to Overnights cost.Ace made no down payment but to pay the amount due within 45 days.On Jan 26,Overnight received$600 from Ace Towling as partial settlement of its account receivable from Ace.On Jan 27,Overnight made a partial payment of$6,800 on its account payable to Snap

12、py tools.On Jan 31,Overnight record the$22,000 accumulated service revenue for January.On Jan 31,Overnight paid$200 utilities and$1,200 wages.The expanded accounting equationNow,lets review how JJs transactions affected the accounting equation.(the expanded accounting equation p50)Income StatementSt

13、atement of Cash FlowsThe cash flow statement reports the cash generated and used during the time interval specified in its heading.Statement of Cash Flows p51It organizes and reports the cash generated and used in the following categories:Operating activities converts the items reported on the incom

14、e statement from the accrual basis of accounting to cash.Investing activitiesreports the purchase and sale of long-term investments and property,plant and equipment.Financing activitiesreports the issuance and repurchase of the companys own bonds and stock and the payment of dividends.Statement of C

15、ash FlowsThe operating,investing,and financing categories include both positive and negative cash flows.The combined total of the three categories of the statement explains the total change in cash from the beginning to the end of the period.It is not unusual for a company to report an increase in c

16、ash from operating activities,but a decrease in the total amount of cash.Relationships Among Financial StatementsDate at beginning of periodDate at end of periodBalance SheetBalance SheetTimeIncome StatementStatement of Cash FlowsFinancial Statement ArticulationFinancial Reporting and Financial Stat

17、ementsStatement of Cash FlowsBalance SheetIncome StatementOther Information:IndustryCompetitorsNational economyFinancial statements are just one source of financial accounting information.The Use of Financial Statements by External PartiesCreditorsInvestorsTwo concerns:LiquidityProfitabilityThe Need

18、 for Adequate DisclosureNotes to the financial statements often provide facts necessary for the proper interpretation of the statements.Income StatementBalance SheetStatement of Cash FlowsManagements Interest in Financial StatementsTake action to improve areas of weak performanceThe ability to obtain funds Strong statement of financial positionStrong income statementStrong statement of cash flowsWindow dressing occurs when management takes measures to make the company appear as strong as possible in it financial statements.