Presentation is loading. Please wait.

Presentation is loading. Please wait.

Power Notes Chapter 1 Introduction to Accounting and Business

Published byAllyson Reeves Modified over 6 years ago

Similar presentations

Presentation on theme: "Power Notes Chapter 1 Introduction to Accounting and Business"— Presentation transcript:

1 Power Notes Chapter 1 Introduction to Accounting and Business
Learning Objectives 1. Nature of a Business 2. The Role of Accounting in Business 3. Business Ethics 4. Profession of Accounting 5. Generally Accepted Accounting Principles 6. Assets, Liabilities, and Owner’s Equity 7. Business Transactions 8. Financial Statements 9. Financial Analysis and Interpretation C1

2 Power Notes Chapter 1 Introduction to Accounting and Business
Slide # Power Note Topics 3 9 11 16 19 53 70 Accounting – An Information Process Users of Accounting Information Profession of Accounting The Accounting Equation Business Transactions Financial Statements Ratio of Liabilities to Owner’s Equity Note: To select a topic, type the slide # and press Enter.

3 Accounting — An Information Process
Identification of Users

4 Accounting — An Information Process
Identification of Users User Information Needs

5 Accounting — An Information Process
Identification of Users User Information Needs Accounting System

6 Accounting — An Information Process
Identification of Users User Information Needs Economic Data and Activities Accounting System

7 Accounting — An Information Process
Identification of Users User Information Needs Economic Data and Activities Accounting System Reports

8 Accounting — An Information Process
Identification of Users User Information Needs Economic Data and Activities Accounting System User Decisions Reports

9 Users of Accounting Information
investors creditors regulators customers competitors Financial Accounting EXTERNAL USERS

10 Users of Accounting Information
investors creditors regulators customers competitors Financial Accounting EXTERNAL USERS Managerial Accounting INTERNAL USERS owners managers employees

11 The Accounting Profession
Government Industry CPA Firms Staff Accountant Junior Accountant Auditor College Graduates What are the starting rates for new graduates?

12 The Accounting Profession
Government Industry CPA Firms Senior Accountant Chief Accountant Supervisor Staff Accountant Junior Accountant Auditor College Graduates How soon would I get promoted?

13 The Accounting Profession
Government Industry CPA Firms Director Manager Controller Senior Accountant Chief Accountant Supervisor Staff Accountant Junior Accountant Auditor College Graduates What are the top positions in each category?

14 The Accounting Profession
Government Industry CPA Firms Vice President Finance Administrator Partner Director Manager Controller Senior Accountant Chief Accountant Supervisor Staff Accountant Junior Accountant Auditor College Graduates What is the fastest path to top management?

15 The Accounting Profession
Government Industry CPA Firms Administrator Vice President Finance Partner 2 1 Director Manager Controller Senior Accountant Chief Accountant Supervisor Staff Accountant Junior Accountant Auditor College Graduates 10 to 20 years of experience 1 6 to 8 years of experience 2

16 The Accounting Equation
Resources What are an organization’s resources called?

17 The Accounting Equation
Resources = Sources Assets What are the sources of the assets? Cost of resources used in the business

18 The Accounting Equation Resources supplied by creditors and owners
Resources = Sources Liabilities Assets Owner’s Equity Resources supplied by creditors and owners Cost of resources used in the business

19 Business Transactions
a. Chris Clark deposits $25,000 in a bank account for NetSolutions. ASSETS LIABILITIES = OWNER’S EQUITY

20 Business Transactions
a. Chris Clark deposits $25,000 in a bank account for NetSolutions. ASSETS LIABILITIES Cash 25,000 = OWNER’S EQUITY

21 Business Transactions
a. Chris Clark deposits $25,000 in a bank account for NetSolutions. ASSETS LIABILITIES Cash 25,000 = OWNER’S EQUITY Chris Clark, Capital 25,000

22 Business Transactions
b. NetSolutions buys land for $20,000. ASSETS LIABILITIES = OWNER’S EQUITY

23 Business Transactions
b. NetSolutions buys land for $20,000. ASSETS LIABILITIES Cash (20,000) = OWNER’S EQUITY

24 Business Transactions
b. NetSolutions buys land for $20,000. ASSETS LIABILITIES Cash (20,000) = OWNER’S EQUITY Land 20,000

25 Business Transactions
c. NetSolutions buys supplies for $1,350, agreeing to pay the supplier in the near future. ASSETS LIABILITIES = OWNER’S EQUITY

26 Business Transactions
c. NetSolutions buys supplies for $1,350, agreeing to pay the supplier in the near future. ASSETS LIABILITIES Supplies 1,350 = OWNER’S EQUITY

27 Business Transactions
c. NetSolutions buys supplies for $1,350, agreeing to pay the supplier in the near future. ASSETS LIABILITIES Accounts Payable 1,350 Supplies 1,350 = OWNER’S EQUITY

28 Business Transactions
d. NetSolutions earns fees of $7,500, receiving cash. ASSETS LIABILITIES = OWNER’S EQUITY

29 Business Transactions
d. NetSolutions earns fees of $7,500, receiving cash. ASSETS LIABILITIES Cash 7,500 = OWNER’S EQUITY

30 Business Transactions
d. NetSolutions earns fees of $7,500, receiving cash. ASSETS LIABILITIES Cash 7,500 = OWNER’S EQUITY Fees Earned 7,500

31 Business Transactions
e. NetSolutions paid: wages, $2,125; rent, $800; utilities, $450; and miscellaneous, $275. ASSETS LIABILITIES = OWNER’S EQUITY

32 Business Transactions
e. NetSolutions paid: wages, $2,125; rent, $800; utilities, $450; and miscellaneous, $275. ASSETS LIABILITIES Cash (3,650) = OWNER’S EQUITY

33 Business Transactions
e. NetSolutions paid: wages, $2,125; rent, $800; utilities, $450; and miscellaneous, $275. ASSETS LIABILITIES Cash (3,650) = OWNER’S EQUITY Expenses (3,650)

34 Business Transactions
f. NetSolutions pays $950 to creditors on account. ASSETS LIABILITIES = OWNER’S EQUITY

35 Business Transactions
f. NetSolutions pays $950 to creditors on account. ASSETS LIABILITIES Cash (950) = OWNER’S EQUITY

36 Business Transactions
f. NetSolutions pays $950 to creditors on account. ASSETS LIABILITIES Accounts Payable (950) Cash (950) = OWNER’S EQUITY

37 Business Transactions
g. At the end of the month, the cost of supplies on hand is $550. ASSETS LIABILITIES = OWNER’S EQUITY

38 Business Transactions
g. At the end of the month, the cost of supplies on hand is $550. ASSETS LIABILITIES Supplies (800) = OWNER’S EQUITY

39 Business Transactions
g. At the end of the month, the cost of supplies on hand is $550. ASSETS LIABILITIES Supplies (800) = OWNER’S EQUITY Supplies Expense (800)

40 Business Transactions
h. Chris Clark withdraws $2,000 in cash. ASSETS LIABILITIES = OWNER’S EQUITY

41 Business Transactions
h. Chris Clark withdraws $2,000 in cash. ASSETS LIABILITIES Cash (2,000) = OWNER’S EQUITY

42 Business Transactions
h. Chris Clark withdraws $2,000 in cash. ASSETS LIABILITIES Cash (2,000) = OWNER’S EQUITY Chris Clark, Drawing (2,000)

43 = Transaction Summary ASSETS LIABILITIES Cash 5,900 OWNER’S EQUITY
Supplies 550 Land 20,000 = OWNER’S EQUITY

44 = Transaction Summary ASSETS LIABILITIES Accts. Payable 400 Cash 5,900
Supplies 550 Land 20,000 = OWNER’S EQUITY

45 = Transaction Summary ASSETS LIABILITIES Accts. Payable 400 Cash 5,900
Supplies 550 Land 20,000 = OWNER’S EQUITY C. Clark, Capital 25,000 C. Clark, Drawing (2,000) Fees Earned 7,500 Wages Expense (2,125) Rent Expense (800) Supplies Expense (800) Utilities Expense (450) Misc. Expense (275)

46 Effects of Transactions on Owner’s Equity

47 Effects of Transactions on Owner’s Equity
decreased by

48 Effects of Transactions on Owner’s Equity
decreased by Owner’s withdrawals Expenses

49 Effects of Transactions on Owner’s Equity
increased by

50 Effects of Transactions on Owner’s Equity
increased by Owner’s investments Revenues

51 Effects of Transactions on Owner’s Equity
decreased by increased by Owner’s withdrawals Expenses Owner’s investments Revenues

52 Effects of Transactions on Owner’s Equity
decreased by increased by Owner’s withdrawals Expenses Owner’s investments Revenues NET INCOME

53 For the Month Ended November 30, 2002
Financial Statements NetSolutions Income Statement For the Month Ended November 30, 2002 Fees earned $7,500 Operating expenses: Wages expense $2,125 Rent expense 800 Supplies expense 800 Utilities expense 450 Miscellaneous expense 275 Total operating expenses 4,450 Net income $3,050

54 For the Month Ended November 30, 2002
Financial Statements NetSolutions Income Statement For the Month Ended November 30, 2002 Fees earned $7,500 Operating expenses: Wages expense $2,125 Rent expense 800 Supplies expense 800 Utilities expense 450 Miscellaneous expense 275 Total operating expenses 4,450 Net income $3,050

55 For the Month Ended November 30, 2002
Financial Statements NetSolutions Income Statement For the Month Ended November 30, 2002 Fees earned $7,500 Operating expenses: Wages expense $2,125 Rent expense 800 Supplies expense 800 Utilities expense 450 Miscellaneous expense 275 Total operating expenses 4,450 Net income $3,050

56 For the Month Ended November 30, 2002
Financial Statements NetSolutions Income Statement For the Month Ended November 30, 2002 Fees earned $7,500 Operating expenses: Wages expense $2,125 Rent expense 800 Supplies expense 800 Utilities expense 450 Miscellaneous expense 275 Total operating expenses 4,450 Net income $3,050

57 Statement of Owner’s Equity For the Month Ended November 30, 2002
Financial Statements NetSolutions Statement of Owner’s Equity For the Month Ended November 30, 2002 Chris Clark, capital, November 1, $ Investment on November 1, 2002 $25,000 Net income for November 3,050 $28,050 Less withdrawals 2,000 Increase in owner’s equity 26,050 Chris Clark, capital, November 30, $26,050

58 Statement of Owner’s Equity For the Month Ended November 30, 2002
Financial Statements NetSolutions Statement of Owner’s Equity For the Month Ended November 30, 2002 Chris Clark, capital, November 1, $ Investment on November 1, 2002 $25,000 Net income for November 3,050 $28,050 Less withdrawals 2,000 Increase in owner’s equity 26,050 Chris Clark, capital, November 30, $26,050

59 Statement of Owner’s Equity For the Month Ended November 30, 2002
Financial Statements NetSolutions Statement of Owner’s Equity For the Month Ended November 30, 2002 Chris Clark, capital, November 1, $ Investment on November 1, 2002 $25,000 Net income for November 3,050 $28,050 Less withdrawals 2,000 Increase in owner’s equity 26,050 Chris Clark, capital, November 30, $26,050

60 Statement of Owner’s Equity For the Month Ended November 30, 2002
Financial Statements NetSolutions Statement of Owner’s Equity For the Month Ended November 30, 2002 Chris Clark, capital, November 1, $ Investment on November 1, 2002 $25,000 Net income for November 3,050 $28,050 Less withdrawals 2,000 Increase in owner’s equity 26,050 Chris Clark, capital, November 30, $26,050

61 Statement of Owner’s Equity For the Month Ended November 30, 2002
Financial Statements NetSolutions Statement of Owner’s Equity For the Month Ended November 30, 2002 Chris Clark, capital, November 1, $ Investment on November 1, 2002 $25,000 Net income for November 3,050 $28,050 Less withdrawals 2,000 Increase in owner’s equity 26,050 Chris Clark, capital, November 30, $26,050

62 Financial Statements NetSolutions Balance Sheet November 30, 2002
Assets Cash $5,900 Supplies 550 Land 20,000 Total assets $26,450 Liabilities Accounts payable $ 400 Owner’s Equity Chris Clark, capital 26,050 Total liabilities and owner’s equity $26,450

63 Financial Statements NetSolutions Balance Sheet November 30, 2002
Assets Cash $5,900 Supplies 550 Land 20,000 Total assets $26,450 Liabilities Accounts payable $ 400 Owner’s Equity Chris Clark, capital 26,050 Total liabilities and owner’s equity $26,450

64 Financial Statements NetSolutions Balance Sheet November 30, 2002
Assets Cash $5,900 Supplies 550 Land 20,000 Total assets $26,450 Liabilities Accounts payable $ 400 Owner’s Equity Chris Clark, capital 26,050 Total liabilities and owner’s equity $26,450

65 Financial Statements NetSolutions Balance Sheet November 30, 2002
Assets Cash $5,900 Supplies 550 Land 20,000 Total assets $26,450 Liabilities Accounts payable $ 400 Owner’s Equity Chris Clark, capital 26,050 Total liabilities and owner’s equity $26,450

66 Statement of Cash Flows For the Month Ended November 30, 2002
Financial Statements NetSolutions Statement of Cash Flows For the Month Ended November 30, 2002 Cash flows from operating activities: Cash received from customers $ 7,500 Deduct cash payments for expenses and payments to creditors 4,600 Net cash flow from operating activities $ 2,900 Cash flows from investing activities: Cash payments for acquisition of land (20,000) Cash flows from financing activities: Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000 Net cash flow from financing activities 23,000 Net cash flow and Nov. 30, 2002 cash balance $5,900

67 Statement of Cash Flows For the Month Ended November 30, 2002
Financial Statements NetSolutions Statement of Cash Flows For the Month Ended November 30, 2002 Cash flows from operating activities: Cash received from customers $ 7,500 Deduct cash payments for expenses and payments to creditors 4,600 Net cash flow from operating activities $ 2,900 Cash flows from investing activities: Cash payments for acquisition of land (20,000 Cash flows from financing activities: Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000 Net cash flow from financing activities 23,000 Net cash flow and Nov. 30, 2002 cash balance $5,900 )

68 Statement of Cash Flows For the Month Ended November 30, 2002
Financial Statements NetSolutions Statement of Cash Flows For the Month Ended November 30, 2002 Cash flows from operating activities: Cash received from customers $ 7,500 Deduct cash payments for expenses and payments to creditors 4,600 Net cash flow from operating activities $ 2,900 Cash flows from investing activities: Cash payments for acquisition of land (20,000) Cash flows from financing activities: Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000 Net cash flow from financing activities 23,000 Net cash flow and Nov. 30, 2002 cash balance $5,900 )

69 Statement of Cash Flows For the Month Ended November 30, 2002
Financial Statements NetSolutions Statement of Cash Flows For the Month Ended November 30, 2002 Cash flows from operating activities: Cash received from customers $ 7,500 Deduct cash payments for expenses and payments to creditors 4,600 Net cash flow from operating activities $ 2,900 Cash flows from investing activities: Cash payments for acquisition of land (20,000 Cash flows from financing activities: Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000 Net cash flow from financing activities 23,000 Net cash flow and Nov. 30, 2002 cash balance $5,900 )

70 Ratio of Liabilities to Owner’s Equity
Objective: Use the ratio of liabilities to owner’s equity to analyze the ability of a business to withstand poor business conditions and to pay its creditors. Formula Ratio of liabilities to owner’s equity Total liabilities = Total owner’s equity Example $400 NetSolutions = .025 or 2.5% $16,050

71 Power Notes This is the last slide in Chapter 1. Chapter 1
Introduction to Accounting and Business This is the last slide in Chapter 1. Note: To see the topic slide, type 2 and press Enter.

Download ppt "Power Notes Chapter 1 Introduction to Accounting and Business"

Similar presentations

C3 - 1 Learning Objectives 1. The Matching Concept 2. Nature of the Adjusting Process 3. Recording Adjusting Entries 4. Summary of Adjustment Process 5.Financial.

C3 - 1 Learning Objectives 1. The Matching Concept 2. Nature of the Adjusting Process 3. Recording Adjusting Entries 4. Summary of Adjustment Process 5.Financial.
C3 - 1 Learning Objectives Power Notes The Matching Concept and the Adjusting Process The Matching Concept and the Adjusting Process 1. The Matching Concept.

C3 - 1 Learning Objectives Power Notes The Matching Concept and the Adjusting Process The Matching Concept and the Adjusting Process 1. The Matching Concept.
C2 - 1 Learning Objectives 1.Usefulness of an Account 2.Characteristics of an Account 3.Analyzing and Summarizing Transactions 4.Illustration of Analyzing.

C2 - 1 Learning Objectives 1.Usefulness of an Account 2.Characteristics of an Account 3.Analyzing and Summarizing Transactions 4.Illustration of Analyzing.
C1 - 1 Learning Objectives 1.Nature of a Business 2.The Role of Accounting in Business 3.Business Ethics 4.Profession of Accounting 5.Generally Accepted.

C1 - 1 Learning Objectives 1.Nature of a Business 2.The Role of Accounting in Business 3.Business Ethics 4.Profession of Accounting 5.Generally Accepted.
Power Notes Chapter 1 Introduction to Accounting and Business

Power Notes Chapter 1 Introduction to Accounting and Business
C1 - 1 Learning Objectives 1.Nature of a Business 2.The Role of Accounting in Business 3.Business Ethics 4.Profession of Accounting 5.Generally Accepted.

C1 - 1 Learning Objectives 1.Nature of a Business 2.The Role of Accounting in Business 3.Business Ethics 4.Profession of Accounting 5.Generally Accepted.
Power Notes Chapter F2 Learning Objectives C2 Analyzing Transactions

Power Notes Chapter F2 Learning Objectives C2 Analyzing Transactions
C4 - 1 Learning Objectives Power Notes Completing the Accounting Cycle Completing the Accounting Cycle 1.Work Sheet 2.Financial Statements 3.Adjusting.

C4 - 1 Learning Objectives Power Notes Completing the Accounting Cycle Completing the Accounting Cycle 1.Work Sheet 2.Financial Statements 3.Adjusting.
Chapter 1 Introduction to Accounting and Business

Chapter 1 Introduction to Accounting and Business
This is NOT a complete review of Chapter 2 & 3. You must still study your notes and chapter reviews from your electronic workbooks and read the Key Concepts.

This is NOT a complete review of Chapter 2 & 3. You must still study your notes and chapter reviews from your electronic workbooks and read the Key Concepts.
C2 - 1 Learning Objectives 1.Usefulness of an Account 2.Characteristics of an Account 3.Analyzing and Summarizing Transactions 4.Illustration of Analyzing.

C2 - 1 Learning Objectives 1.Usefulness of an Account 2.Characteristics of an Account 3.Analyzing and Summarizing Transactions 4.Illustration of Analyzing.
AC 113- Unit 3 Chapter 2.

AC 113- Unit 3 Chapter 2.
C1 - 1 Learning Objectives 1.Nature of a Business 2.The Role of Accounting in Business 3.Business Ethics 4.Profession of Accounting 5.Generally Accepted.

C1 - 1 Learning Objectives 1.Nature of a Business 2.The Role of Accounting in Business 3.Business Ethics 4.Profession of Accounting 5.Generally Accepted.
Introduction to Accounting and Business

Introduction to Accounting and Business
CHAPTER 1 T.Haya Alajaji BUSINESS DECISIONS BUSINESS DECISIONS And FINANCIAL ACCOUNTING..

CHAPTER 1 T.Haya Alajaji BUSINESS DECISIONS BUSINESS DECISIONS And FINANCIAL ACCOUNTING..
Introduction to Accounting and Business 1. 1-2 After studying this chapter, you should be able to: Introduction to Accounting and Business 3 State the.

Introduction to Accounting and Business After studying this chapter, you should be able to: Introduction to Accounting and Business 3 State the.
Principles of Financial Accounting, 11e

Principles of Financial Accounting, 11e
Accounting: The Language

Accounting: The Language
Accounting 1 MGT 130 Lecture 02. Overview of Lecture 01 Lecture 02.

Accounting 1 MGT 130 Lecture 02. Overview of Lecture 01 Lecture 02.
1 1 Introduction to Accounting and Business. 2 Service Business Service Service Business Service The Walt Disney CompanyEntertainment Delta Air LinesTransportation.

1 1 Introduction to Accounting and Business. 2 Service Business Service Service Business Service The Walt Disney CompanyEntertainment Delta Air LinesTransportation.

Similar presentations

Ads by Google