1. Financial Accounting Mission One Agenda Introductions Syllabus
January 28, 2016
Agenda
Introductions
Syllabus
Mission slides
Problems

2. Accounting is crucial for success
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3. Luca Pacioli: The Father of Accounting
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4. The Accounting Equation
Assets = Liabilities + Equity
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5. Pavlina and Singh Copyright 2016 - Mission One
Chart of Accounts
Assets
Liabilities
Stockholders' Equity
Current assets
Current liabilities
Capital by owners
Cash and Cash Equivalents
Accrued Expense Payable
Common Stock
Accounts Receivables
Accounts Payable
Additional Paid-In Capital
Inventory
Salaries and Wages Payable
Supplies
Utility Expense Payable
Prepaid Expenses
Taxes Payable
Investment Securities
Unearned Revenue
Retained earnings
Notes Receivables
Dividends Payable
Net Income
- Dividends
Non-current assets
Non-current liabilities
Land
Notes Payable
Property, Plant and Equipment
Long-Term Bonds
Intangibles
Deferred Tax Liabilities
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6. Hannah’s Furniture Store
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7. For the month ending, January 31, 2016
Income Statement
Hannah's Furniture Store
Income Statement
For the month ending, January 31, 2016
Revenues
$ ,000
Cost of Goods Sold
$ (8,000)
Salaries and wage expense
$ (1,500)
Utility expense
$ (100)
Net Income $
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8. Balance Sheet Hannah's Furniture Store Balance Sheet
On January 31, 2016
Assets
Cash
$ ,500
Accounts Receivables
$ ,000
Inventory
$ ,000
Total Assets
$ ,500
Liabilities
Utility expense payable $
Total Liabilities
Shareholders' Equity
Common Stock
$ ,000
Retained Earnings $
Total Shareholders' Equity
$ ,400
Total Liabilities and Shareholders' Equity
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9. Changes in Stockholders’ Equity
Hannah's Furniture Store
Changes in shareholders' equity
For the month of January 2016
Common stock
Beginning $
New issuance
$ ,000
Total common stock
Retained earnings
Net Income $
Dividends
Total retained earnings
Total common stock and retained earnings
$ ,400
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10. Statement of Cashflows
Hannah's Furniture Store
Statement of cash flows
For the month of January 2016
Cash flow from Operations
Net Income $
Increase in accounts receivables
$ (10,000)
Increase in inventory
$ (42,000)
Increase in utility expense payable $
Cash flow from operating activities
$ (51,500)
Cash flow from Investing
No transactions
Cash flow from investing activities $
Cash flow from Financing
Issuance of common stock
$ ,000
Cash flow from financing activities
Change in cash
$ ,500
Beginning cash
Ending cash
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11. The Financial Accounting Model
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12. The Financial Accounting Model (contd.)
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13. Hannah’s Furniture Store - Trial Balance
1/1/2016
January
1/31/2016
Trial Balance
Beginning Balances
Transactions
Adjusted Trial Balance
Debit
Credit
Assets:
Cash  0
100,000 
1,500
50,000 
48,500
Accounts Receivable
 10,000
10,000
Inventory
 50,000
 8,000
42,000
Liabilities:
Utility Expense Payable
 100
100
Stockholder's Equity:
Common Stock
 100,000
100,000
Retained Earnings
Revenues:
Sales Revenue: 0 
10,000 
Expenses:
Cost of Goods Sold
8,000 
Wages & Salary Expense
 1,500
Utility Expense
Total
169,600
110,100
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14. Hannah’s Furniture Store - Trial Balance
1/31/2016
Month End
Trial Balance
Adjusted Trial Balance
Closing Entries
Post-Closing Trial Balance
Debit
Credit
Assets:
Cash
48,500
Accounts Receivable
10,000
Inventory
42,000
Liabilities:
Utility Expense Payable
100
Stockholder's Equity:
Common Stock
100,000
Retained Earnings
400
Revenues:
Sales Revenue:
Expenses:
Cost of Goods Sold
8,000
Wages & Salary Expense
1,500
Utility Expense
Total
110,100
100,500
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15. Pavlina and Singh Copyright 2016 - Mission One
Two Global Standards
U.S. GAAP
IFRS
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16. Accounting Concepts and Principles
Transactions in General Ledger and then Trial Balance
Financial Statements
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