AC113 Accounting for Non-Accounting Majors Seminar: Unit 2 Emil Koren, CPA, MBA

Welcome Introduction Accounting definitions Basic accounting terms Accounting statements Accounting acronyms Assignment E1-5 Assignment E1-21

Introductions Please read Chapter 1 Review the PowerPoint presentation that is included in the Unit 2 Read and study the Vocabulary for this Unit Post to the Discussion question Do the Assignment Take the Quiz

Accounting definitions An information system that provides reports to stakeholders about the economic activities and condition of a business. Accounting equation Assets = Liabilities + Stockholders’ Equity

Basic accounting terms Assets The resources owned by a business. Liabilities The rights of creditors that represent a legal obligation to repay an amount borrowed according to terms of the borrowing agreement. Stockholders’ equity The stockholders’ rights to the assets of a business.

More Basic accounting terms Revenue The increase in assets from selling products or services to customers. Expenses Costs used to earn revenues. Net income The excess of revenues over expenses. Net loss The excess of expenses over revenues. Dividends Distributions of the earnings of a corporation to its stockholders.

Accounting statements Income statement A summary of the revenue and expenses for a specific period of time, such as a month or a year. Retained earnings statement A summary of the changes in the retained earnings of a corporation for a specific period of time, such as a month or a year. Balance sheet A list of the assets, liabilities, and owner’s equity as of a specific date, usually at the close of the last day of a month or a year. Statement of cash flows A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.

Accounting acronyms GAAP FASB SEC IASB Generally Accepted Accounting Principles FASB Financial Accounting Standards Board SEC Securities and Exchange Commission IASB International Accounting Standards Bard

Assignment E1-5 Determine the missing Amounts Assets = Liabilities + Stockholders’ Equity X = $35,000 + $60,000 $80,000 = X + $35,000 $675,000= $227,000 + X

Assignment E1-5 Determine the missing Amounts Assets = Liabilities + Stockholders’ Equity $95,000 = $35,000 + $60,000 $80,000 = $45,000 + $35,000 $675,000= $227,000 + $448,000

Assignment E1-21 Situation 1 Situation 2 Situation 3 Situation 4

Assignment E1-21 Situation 1 The Income Statement Situation 2 The Statement of Cash Flows Situation 3 The Balance Sheet Situation 4 The Income Statement Situation 5 The Statement of Cash Flows

Questions and Comments ?