Kế toán, kiểm toán - Chapter 1: Accounting concepts

Explain the accounting entity assumption. Define assets, liabilities, owner's equity, revenue and expenses and classify items into assets, liabilities, owner's equity, revenue and expenses. Define the accounting equation and describe the link between the equation and the accounting entity assumption. Analyse the effect of transactions on the accounting equation.

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This is the prescribed textbook for your courseAvailable now at your campus bookstore!1Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by Chapter 1 Accounting concepts 2Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by Objectives:Explain the accounting entity assumption.Define assets, liabilities, owner's equity, revenue and expenses and classify items into assets, liabilities, owner's equity, revenue and expenses. Define the accounting equation and describe the link between the equation and the accounting entity assumption.Analyse the effect of transactions on the accounting equation.3Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by Accounting entity The entity assumption states that the business is a distinct accounting entity from the owner.4Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by AssetsAssets can be classified as items of valueowned by the business or owed to thebusiness.Some examples are:CashBuildingsMotor Vehicles.5Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by Assets (continued)Current assets include:CashDebtors/account receivable.Non-current assets include:CarBuildingsLand.6Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by LiabilitiesLiabilities are obligations or debts a firmmust pay.Some examples are:CreditorsLoans Bank overdrafts.7Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by Liabilities (continued)Current liabilityAccounts payableNon-current liabilityLoans8Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by Owners equityOwners equity records all dealings between the owner and the business.Capital is what the owner contributes to the business. Drawings are withdrawals of money or assets for personal use from the business.9Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by Accounting equationAssets = Liabilities + Owners equityorLiabilities = Assets – Owners equityorOwners equity = Assets – Liabilities10Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by Accounting equation (continued)The accounting equation: must always balancecan be used to find an unknown variableensures that the Statement of Financial Position balances.11Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by Extended accounting equationA = L + [OE + (R – E)]A = AssetsL = LiabilitiesOE = Owners EquityR = RevenueE = Expenses12Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Accounting for Business – A non-accountant’s guide 2/e by