chapter 1 accounting in action
DESCRIPTION
FINANCIAL ACCOUNTINGTRANSCRIPT
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Chapter
1
Accounting in Action
Financial Accounting, IFRS Edition
Weygandt Kimmel Kieso
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1. Explain what accounting is.
2. Identify the users and uses of accounting.
3. Understand why ethics is a fundamental business concept.
4. Explain accounting standards and the measurement principles.
. Explain the monetary unit assumption and the economic entity
assumption.
!. "tate the accounting e#uation$ and define its components.
%. Analy&e the effects of business transactions on the accountinge#uation.
'. Understand the four financial statements and how they are
prepared.
Study ObjectivesStudy Objectives
Study ObjectivesStudy Objectives
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Ethics inEthics infinancialfinancialreportingreporting
AccountingAccounting
standardsstandards
AssumptionsAssumptions
What isWhat is
Accounting?Accounting?
What isWhat is
Accounting?Accounting?
The BuildingThe Building
Blocks ofBlocks of
AccountingAccounting
The BuildingThe Building
Blocks ofBlocks of
AccountingAccounting
The BasicThe Basic
AccountingAccounting
EquationEquation
The BasicThe Basic
AccountingAccounting
EquationEquation
Using theUsing theAccountingAccounting
EquationEquation
Using theUsing theAccountingAccounting
EquationEquation
FinancialFinancial
StateentsStateents
FinancialFinancial
StateentsStateents
(hree(hreeacti)itiesacti)ities
*ho uses*ho usesaccountingaccounting
data+data+
AssetsAssets
,iabilities,iabilities
E#uityE#uity
(ransaction(ransactionanalysisanalysis
"ummary of"ummary oftransactionstransactions
IncomeIncomestatementstatement
-etained-etainedearningsearnings
statementstatement
"tatement of"tatement of
financialfinancialpositionposition
"tatement of"tatement ofcash flowscash flows
Accounting in ActionAccounting in Action
Accounting in ActionAccounting in Action
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What is Accounting?What is Accounting?
What is Accounting?What is Accounting?
SO 1 Explain what accounting is.
The "u#"ose of accounting$
1/ to identif%identif%$ #eco#d#eco#d$ and counicatecounicatethe economic
e)ents of an
2/ organi&ation to
3/ interested users.
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Th#ee Acti'ities
What is Accounting?What is Accounting?
What is Accounting?What is Accounting?
(he accounting process includes
the boo00eeping function.
(llust#ation 1-1
(he acti)ities of theaccounting process
SO 1 Explain what accounting is.
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*anageent
+uan
,esou#cesTaing
Autho#ities
.a/o#Unions
,egulato#%
Agencies
*a#keting
Finance
(n'esto#s
0#edito#s
SO !denti"y the users and uses o" accounting.
0ustoe#s
(nte#nal
Use#s
Ete#nal
Use#s
What is Accounting?What is Accounting?What is Accounting?What is Accounting?
Who Uses Accounting ata
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ommon uestions As0ed User1. an we afford to gi)e our
employees a pay raise+ +uan ,esou#ces
2. id the company earn asatisfactory income+
3. "hould any product lines beeliminated+
4. Is cash sufficient to paydi)idends to shareholders+
. *hat price for our product willmaximi&e net income+
What is Accounting?What is Accounting?What is Accounting?What is Accounting?
SO !denti"y the users and uses o" accounting.
!. *ill the company be able topay its debts+
(n'esto#s
*anageent
Finance
*a#keting
0#edito#s
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#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
Ethics (n Financial ,e"o#ting
SO & 'nderstand why ethics is a "unda(ental business concept.
"tandards of conduct by which ones actions are 5udged
as right or wrong$ honest or dishonest$ fair or not fair$
are Ethics.
-ecent financial scandals include6 EnronU"A/$
7armalatI(A/$ "atyam omputer "er)ices I8/$AI9
U"A/$ and others.
Effecti)e financial reporting depends on sound ethical
beha)ior.
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#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
Ethics (n Financial ,e"o#ting
SO & 'nderstand why ethics is a "unda(ental business concept.
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Ethics are the standards of conduct by which one:sactions are 5udged as6
a. right or wrong.b. honest or dishonest.
c. fair or not fair.
d. all of these options.
Ethics are the standards of conduct by which one:sactions are 5udged as6
a. right or wrong.b. honest or dishonest.
c. fair or not fair.
d. all of these options.
,e'ie5 6uestion
SO & 'nderstand why ethics is a "unda(ental business concept."olution onnotes page
#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
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International ;inancial -eporting "tandards I;-"/
SO ) Explain accounting standards and the (easure(ent principles.
;inancial Accounting "tandards
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0ost 7#inci"le 8+isto#ical9> dictates that companies record
assets at their cost.
Issues6
-eported at cost when purchased and also o)er the time the
asset is held.
ost easily )erified$ mar0et )alue is often sub5ecti)e.
;air )alue information may be more useful.
#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
*easu#eent 7#inci"les
SO ) Explain accounting standards and the (easure(ent principles.
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Fai# :alue 7#inci"le> indicates that assets and liabilities should
be reported at fair )alue.
In determining which measurement principle to use$ companies
weigh the factual nature of cost figures )ersus the rele)ance of
fair )alue.
?nly in situations where assets are acti)ely traded$ such asin)estment securities$ is the fair )alue principle applied.
#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
*easu#eent 7#inci"les
SO ) Explain accounting standards and the (easure(ent principles.
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*oneta#% Unit Assu"tion> include in the accounting records
only transaction data that can be expressed in terms of money.
Econoic Entit% Assu"tion> re#uires that acti)ities of theentity be 0ept separate and distinct from the acti)ities of its
owner and all other economic entities.
7roprietorship.
7artnership.
orporation.
Fo#s of Business
;5ne#shi"
Assu"tions
#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
SO * Explain the (onetary unit assu(ption and the econo(ic entity assu(ption.
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7#o"#ieto#shi" 7a#tne#shi" 0o#"o#ation
?wned by two or
more persons.
?ften retail and
ser)ice@type
businesses
9enerally unlimited
personal liability
7artnership
agreement
?wnership di)ided
into shares
"eparate legal
entity organi&ed
under state
corporation law
,imited liability
9enerally owned
by one person.
?ften small
ser)ice@type
businesses
?wner recei)es
any profits$ suffers
any losses$ and is
personally liable for
all debts.
SO * Explain the (onetary unit assu(ption and the econo(ic entity assu(ption.
#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
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ombining the acti)ities of ellogg and 9eneral Billswould )iolate the
a. cost principle.
b. economic entity assumption.
c. monetary unit assumption.
d. ethics principle.
ombining the acti)ities of ellogg and 9eneral Billswould )iolate the
a. cost principle.
b. economic entity assumption.
c. monetary unit assumption.
d. ethics principle.
,e'ie5 6uestion
SO * Explain the (onetary unit assu(ptionand the econo(ic entity assu(ption.
#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
"olution onnotes page
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A business organi&ed as a separate legal entity understate law ha)ing ownership di)ided into shares is a
a. proprietorship.b. partnership.
c. corporation.
d. sole proprietorship.
SO * Explain the (onetary unit assu(ptionand the econo(ic entity assu(ption.
,e'ie5 6uestion
#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
"olution onnotes page
A business organi&ed as a separate legal entity understate law ha)ing ownership di)ided into shares is a
a. proprietorship.b. partnership.
c. corporation.
d. sole proprietorship.
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(rue
;alse
(rue
Indicate whether each of the followingstatements presented below is true or false.
"olution onnotes page SO * Explain the (onetary unit assu(ptionand the econo(ic entity assu(ption.
#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
1. (he three steps in the accounting process are
identification$ recording$ and communication.
2. (he two most common types of external users
are in)estors and company officers.
3. "hareholders in a corporation en5oy limited legal
liability as compared to partners in a partnership.
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;alse
(rue
Indicate whether each of the followingstatements presented below is true or false.
"olution onnotes page SO * Explain the (onetary unit assu(ptionand the econo(ic entity assu(ption.
#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting#he $uilding $loc%s o" Accounting
4. (he primary accounting standard@setting body
outside the United "tates is the International
Accounting "tandards
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Slide1-21 SO * Explain the (onetary unit assu(ption and the econo(ic entity assu(ption.
Answer on notes pageAnswer on notes page
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AssetsAssetsAssetsAssets .ia/ilities.ia/ilities.ia/ilities.ia/ilities Equit%Equit%Equit%Equit%< =
7ro)ides the unde#l%ing f#ae5o#kfor recording andsummari&ing economic e)ents.
Applies to all economic entities regardless of si&e.
#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation
SO , State the accounting e+uation- and de"ine its co(ponents.
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AssetsAssetsAssetsAssets
7ro)ides the unde#l%ing f#ae5o#kfor recording andsummari&ing economic e)ents.
#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation
-esources a business owns.7ro)ide future ser)ices or benefits.
ash$ In)entory$ E#uipment$ etc.
Assets
.ia/ilities.ia/ilities.ia/ilities.ia/ilities Equit%Equit%Equit%Equit%< =
SO , State the accounting e+uation- and de"ine its co(ponents.
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7ro)ides the unde#l%ing f#ae5o#kfor recording andsummari&ing economic e)ents.
#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation
laims against assets debts and obligations/.reditors @ party to whom money is owed.
Accounts payable$ 8otes payable$ etc.
SO , State the accounting e+uation- and de"ine its co(ponents.
.ia/ilities
AssetsAssetsAssetsAssets .ia/ilities.ia/ilities.ia/ilities.ia/ilities< =
Equit%Equit%Equit%Equit%
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7ro)ides the unde#l%ing f#ae5o#kfor recording andsummari&ing economic e)ents.
#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation
?wnership claim on total assets.-eferred to as residual e#uity.
"hare capital and retained earnings.
SO , State the accounting e+uation- and de"ine its co(ponents.
Equit%
AssetsAssetsAssetsAssets .ia/ilities.ia/ilities.ia/ilities.ia/ilities Equit%Equit%Equit%Equit%< =
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,e'enuesresult from business acti)ities entered into for the purpose
of earning income.
9enerally results from selling merchandise$ performing ser)ices$
renting property$ and lending money.
(llust#ation 1-)
SO , State the accounting e+uation- and de"ine its co(ponents.
#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation
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E"ensesare the cost of assets consumed or ser)ices used in the
process of earning re)enue.
ommon expenses are salaries expense$ rent expense$ utilities
expense$ tax expense$ etc.
(llust#ation 1-)
SO , State the accounting e+uation- and de"ine its co(ponents.
#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation
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i'idends are the distribution of cash or other assets to shareholders.
-educe retained earnings
8ot an expense
SO , State the accounting e+uation- and de"ine its co(ponents.
#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation
(llust#ation 1-)
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lassification
lassify the following items as issuance ofshares$ di)idends$ re)enues$ or expenses.
"olution onnotes page
1. -ent expense
2. "er)ice re)enue
3. i)idends
4. "alaries expense
SO , State the accounting e+uation- and de"ine its co(ponents.
#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation#he $asic Accounting E+uation
(hen indicate whether each item increases or decreases e#uity.
Effect on E#uity
Expense ecrease
-e)enue Increase
i)idends ecrease
Expense ecrease
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'sing #he Accounting E+uation'sing #he Accounting E+uation'sing #he Accounting E+uation'sing #he Accounting E+uation
T#ansactionsare a businesss economic e)entsrecorded by accountants.
Bay be external or internal.
8ot all acti)ities represent transactions.
Each transaction has a dual effecton the accounting
e#uation.
SO Analy/e the e""ects o" business transactions on the accounting e+uation.
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(llust#ation$ Are the following e)ents recorded in theaccounting records+
E'ent7urchasecomputer.
0#ite#ion Is the financial position assets$ liabilities$ ore#uity/ of the company changed+
iscussproduct
design with
customer.
7ay rent.
,eco#d>
ont ,eco#d
'sing #he Accounting E+uation'sing #he Accounting E+uation'sing #he Accounting E+uation'sing #he Accounting E+uation
(llust#ation 1-
SO Analy/e the e""ects o" business transactions on the accounting e+uation.
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Slide1-32 SO Analy/e the e""ects o" business transactions on the accounting e+uation.
'sing #he Accounting E+uation'sing #he Accounting E+uation'sing #he Accounting E+uation'sing #he Accounting E+uation
T#ansaction Anal%sis
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T#ansaction 819@ (n'estent /% Sha#eholde#s@T#ansaction 819@ (n'estent /% Sha#eholde#s@ -ay and
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T#ansaction 829@ 7u#chase of Equi"ent fo# 0ash@T#ansaction 829@ 7u#chase of Equi"ent fo# 0ash@ "oftbytepurchases computer e#uipment for D%$CCC cash.
#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
"olution onnotes page SO Analy/e the e""ects o" business transactions
on the accounting e+uation.
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Slide1-3!
#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
T#ansaction 839@ 7u#chase of Su""lies on 0#edit@T#ansaction 839@ 7u#chase of Su""lies on 0#edit@ "oftbytepurchases for D1$!CC from Acme "upply ompany computer
paper and other supplies expected to last se)eral months.
"olution onnotes page SO Analy/e the e""ects o" business transactions
on the accounting e+uation.
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Slide1-3&
#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
T#ansaction 849@ Se#'ices 7#o'ided fo# 0ash@T#ansaction 849@ Se#'ices 7#o'ided fo# 0ash@ "oftbyterecei)es D1$2CC cash from customers for programming ser)ices
it has pro)ided.
"olution onnotes page SO Analy/e the e""ects o" business transactions
on the accounting e+uation.
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Slide1-3)
#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
T#ansaction 8!9@ 7u#chase of Ad'e#tising on 0#edit@T#ansaction 8!9@ 7u#chase of Ad'e#tising on 0#edit@ "oftbyterecei)es a bill for D2C from the aily 8ews for ad)ertising but
postpones payment until a later date.
"olution onnotes page SO Analy/e the e""ects o" business transactions
on the accounting e+uation.
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Slide1-3
#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
T#ansaction 8&9@ Se#'ices 7#o'ided fo# 0ash and 0#edit@T#ansaction 8&9@ Se#'ices 7#o'ided fo# 0ash and 0#edit@"oftbyte pro)ides D3$CC of programming ser)ices for
customers. (he company recei)es cash of D1$CC from
customers$ and it bills the balance of D2$CCC on account.
"olution onnotes page SO Analy/e the e""ects o" business transactions
on the accounting e+uation.
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Slide1-3
#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
T#ansaction 8)9@ 7a%ent of E"enses@T#ansaction 8)9@ 7a%ent of E"enses@ "oftbyte pays thefollowing Expenses in cash for "eptember6 store rent D!CC$
salaries of employees DCC$ and utilities D2CC.
"olution onnotes page SO Analy/e the e""ects o" business transactionson the accounting e+uation.
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Slide1-4
#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
T#ansaction 89@ 7a%ent of Accounts 7a%a/le@T#ansaction 89@ 7a%ent of Accounts 7a%a/le@ "oftbytepays its D2C aily 8ews bill in cash.
"olution onnotes page SO Analy/e the e""ects o" business transactionson the accounting e+uation.
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#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
T#ansaction 89@ ,ecei"t of 0ash on Account@T#ansaction 89@ ,ecei"t of 0ash on Account@ "oftbyterecei)es D!CC in cash from customers who had been billed for
ser)ices Fin (ransaction !/G.
"olution onnotes page SO Analy/e the e""ects o" business transactionson the accounting e+uation.
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Slide1-42
#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
T#ansaction 819@ i'idends@T#ansaction 819@ i'idends@ (he corporation pays a di)idendof D1$3CC in cash.
"olution onnotes page SO Analy/e the e""ects o" business transactionson the accounting e+uation.
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#ransactions Analysis#ransactions Analysis#ransactions Analysis#ransactions Analysis
Sua#% of T#ansactionsSua#% of T#ansactions
(llust#ation 1-1
(abular summary of"oftbyte transactions
SO Analy/e the e""ects o" business transactions on the accounting e+uation.
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ompanies prepare four financial statements from thesummari&ed accounting data6
ompanies prepare four financial statements from thesummari&ed accounting data6
"tatementof ;inancial
7osition
Income"tatement
"tatementof ash;lows
-etainedEarnings
"tatement
0inancial State(ents0inancial State(ents0inancial State(ents0inancial State(ents
SO 'nderstand the "our "inancial state(ents and how they are prepared.
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Slide1-4!
8et income will result during a time period when6
a. assets exceed liabilities.
b. assets exceed re)enues.
c. expenses exceed re)enues.
d. re)enues exceed expenses.
8et income will result during a time period when6
a. assets exceed liabilities.
b. assets exceed re)enues.
c. expenses exceed re)enues.
d. re)enues exceed expenses.
0inancial State(ents0inancial State(ents0inancial State(ents0inancial State(ents
,e'ie5 6uestion,e'ie5 6uestion
"olution onnotes page
SO 'nderstand the "our "inancial state(ents and how they are prepared.
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Slide1-4&
0inancial State(ents0inancial State(ents0inancial State(ents0inancial State(ents (ncoe Stateent
-eports the re)enues and expenses for a specific period of time.
8et income > re)enues exceed expenses.
8et loss > expenses exceed re)enues.(llust#ation 1-11
;inancial statements andtheir interrelationships
SO 'nderstand the "our "inancial state(ents and how they are prepared.
0i i l St t t0i i l St t t8et income is needed to determine the
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Slide1-4)
0inancial State(ents0inancial State(ents0inancial State(ents0inancial State(ents8et income is needed to determine theending balance in retained earnings.
(llust#ation 1-11
;inancial statements andtheir interrelationships
SO SO
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Slide1-4
0inancial State(ents0inancial State(ents0inancial State(ents0inancial State(ents
"tatement indicates the reasons whyretained earnings has increased or
decreased during the period.
,etained Ea#ningsStateent
(llust#ation 1-11
;inancial statements andtheir interrelationships
SO 'nderstand the "our "inancial state(ents and how they are prepared.
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Slide1-4
0inancial0inancial
State(entsState(ents
0inancial0inancial
State(entsState(ents
(he endingbalance inretained
earnings isneeded inpreparing thestatement offinancial position
(llust#ation 1-11
;inancial statements andtheir interrelationships
SO 'nderstand the "our "inancial state(ents and how they are prepared.
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Slide1-!
0inancial State(ents0inancial State(ents0inancial State(ents0inancial State(ents Balance Sheet
SO 'nderstand the "our "inancial state(ents and how they are prepared.
(llust#ation 1-11;inancial statements andtheir interrelationships
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Slide1-!1
0inancial0inancial
State(entsState(ents
0inancial0inancial
State(entsState(ents
(llust#ation 1-11
;inancial statements andtheir interrelationships
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Slide1-!2
0inancial State(ents0inancial State(ents0inancial State(ents0inancial State(ents
Information for a specific period of time.
Answers the following6
1. *here did cash come from+
2. *hat was cash used for+
3. *hat was the change in the cash balance+
Stateent of 0ash Flo5sStateent of 0ash Flo5s
SO 'nderstand the "our "inancial state(ents and how they are prepared.
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Slide1-!3
0inancial State(ents0inancial State(ents0inancial State(ents0inancial State(ents Stateent of 0ash Flo5s
(llust#ation 1-11;inancial statements andtheir interrelationships
SO 'nderstand the "our "inancial state(ents and how they are prepared.
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Slide1-!4 SO 'nderstand the "our "inancial state(ents and how they are prepared.
Answer onAnswer on
notes pagenotes page
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Slide1-!!
*hich of the following financial statements is preparedas of a specific date+
a.
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(n 22 the U@S@ 0ong#ess issued the Sa#/anes-;le% Act 8S;9
5hich andated ce#tain inte#nal cont#ols fo# la#ge "u/lic
co"anies listed on U@S@ echanges@ e/ate a/out inte#national
co"anies 8non-U@S@9 ado"ting S;-t%"e standa#ds cente#s on5hethe# the /enefits eceed the costs@ The conce#n is that the
highe# costs of S; co"liance a#e aking the U@S@ secu#ities
a#kets less co"etiti'e@
Financial f#auds ha'e occu##ed at co"anies such as Sat%a
0o"ute# Se#'ices 8(C9 7a#alat 8(TA9 and ,o%al Ahold 8C.9@
The% ha'e also occu##ed at la#ge U@S@ co"anies such as En#on
Wo#ld0o and A(D@
Accounting in Action
Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7
ey ifferencesey ifferences
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Slide1-!)
(F,S tends to /e less detailed in its accounting and disclosu#e
#equi#eents than DAA7@ This diffe#ence in a""#oach has #esulted
in a de/ate a/out the e#its of "#inci"les-/ased 8(F,S9 'e#sus
#ules-/ased 8DAA79 standa#ds@U@S@ #egulato#s ha'e #ecentl% eliinated the need fo# fo#eign
co"anies that t#ade sha#es in U@S@ a#kets to #econcile thei#
accounting 5ith DAA7@
DAA7 is /ased on a conce"tual f#ae5o#k that is siila# to that
used to de'elo" (F,S@
Accounting in Action
Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7
ey ifferencesey ifferences
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Slide1-!
The th#ee coon fo#s of /usiness o#ganiGation that a#e
"#esented in the cha"te# "#o"#ieto#shi"s "a#tne#shi"s and
co#"o#ations a#e also found in the United States@ Because the
choice of /usiness o#ganiGation is influenced /% facto#s such aslegal en'i#onent ta #ates and #egulations and deg#ee of
ent#e"#eneu#is the #elati'e use of each fo# 5ill 'a#% ac#oss
count#ies@
T#ansaction anal%sis is /asicall% the sae unde# (F,S and DAA7
/ut as %ou 5ill see in late# cha"te#s the diffe#ent standa#ds a%
i"act ho5 t#ansactions a#e #eco#ded@
Accounting in Action
Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7
ey ifferencesey ifferences
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Slide1-!
,oo0ing to the ;uture,oo0ing to the ;uture
Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7Unde#standing U@S@ DAA7
Accounting in ActionBoth the (ASB and the FASB a#e ha#d at 5o#k de'elo"ing standa#ds
that 5ill lead to the eliination of aHo# diffe#ences in the 5a%
ce#tain t#ansactions a#e accounted fo# and #e"o#ted@ 0onside# fo#
ea"le that as a #esult of a Hoint "#oHect on the conce"tualf#ae5o#k the definitions of the ost fundaental eleents
8assets lia/ilities equit% #e'enues and e"enses9 a% actuall%
change@ +o5e'e# 5hethe# the (ASB ado"ts inte#nal cont#ol
"#o'isions siila# to those in S; #eains to /e seen@
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Slide1-&
7u/lic accounting
7#i'ate accounting
SO 2 Explain the career opportunities in accounting.
Career OpportunitiesCareer OpportunitiesCareer OpportunitiesCareer Opportunities A77EC(
Do'e#nent
Fo#ensic accounting
Sho5 e
the *one%
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