1.Introduction to Accounting

*,*,单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,*,Unit OneIntroduction to Accounting,11/26/2024,1,Study Targets:,To describe the information System of Accounting,To describe the profession of Accounting,To describe the equation of Accounting,To describe financial Statement,To describe professional Ethics in Accounting,11/26/2024,2,1.1 Accounting is a system of gathering,summarizing,and communicating financial information for a business,government,or other organizations.,11/26/2024,3,The functions of accounting system:,Interpret and record the effects of business transactions,Classify the effects of similar transactions to management and reports(interior use),Summarize and communicate the information to decision-makers(exterior use),11/26/2024,4,The purposes of accounting system:,Provide information for managers and outsiders to use in decision-making,also:,produce operating documents,protect the companys assets,provide data for company tax return,provide the basis for reimbursement of costs by clients or customers,prepare documents of private information,11/26/2024,5,1.2 Accounting and Its ProfessionHistory of Accounting:Origin:China,Babylonia,Greece and Egyptthe 15,th,century:“double-entry-system”the foundation of the modern accounting the 18th century:cost accounting the 19th century:independent audit American Institute of Certified Public Accountant(AICPC)Chinese Institute of Certified Public Accountant(CICPC)computer revolution:software,11/26/2024,6,Three categories of accountants,private accountants-work for an employer;serve accounting,budgeting,internal auditing,public accountants-work for many clients;serve auditing,management advisory,tax service,government accountants-work for federal,provincial and municipal agencies;serve auditing tax return,accumulating financial information,11/26/2024,7,Three main fields and not-for-profit agencies of account practice:,financial accounting,managerial accounting,tax accounting,not-for-profit accounting,11/26/2024,8,What activities do accountants perform?,Financialstatement preparation,statement analysis,auditing,consulting,planning,Managerialcost accounting,budgeting,internal auditing,management consulting,Taxationpreparation,planning,investigations,consulting,Accounting-relatedlenders,consultants,analysts,traders,managers,directors,underwriters,planners,appraisers,11/26/2024,9,1.3 Accounting Equation,Accounting elements:,Assets,Liabilities,Owners equity,Revenue,Expense,profit,11/26/2024,10,Assets=Liabilities+Owners Equity,The equation between the total amount of assets and source amount owned by an enterprise wont be change.,The total amount of assets will always equal to the claim rights of these assets by creditors and owners equity,The above is the fundamental accounting equation,accounting for the common quantitative relation among the three accounting elements of assets,liabilities and equity.,11/26/2024,11,Revenue Expense=Profit,Assets=,Liabilities+Owners,Equity+(Revenue,-Expense),Or:Assets=Liabilities+Owners Equity+profit,Profit Tax=Retained Earning,(Retained Earning is an item in owners equity.),At the end of an accounting year,the equation restores to:,Assets=Liabilities+Owners Equity,11/26/2024,12,1.4 Four Principal Financial Statements,Income Statementa summary of the revenue and expenses for a specific period of time,Statement of Owners Equitya summary of the changes in the owners equity that have occurred during a specific period of time.,Balance Sheeta list of the assets,liabilities,and owners equity at a specific date.,Statement of Cash Flowsa summary of the cash receipts and cash payments for a specific period of time.,11/26/2024,13,1.5 Professional Ethics in Accounting,Integrity,have a duty to report favorable as well as unfavorable information,refrain from taking actions to undermine legitimate and ethical objectives,not take unfair advantage of information,act in the interests not only of their clients but of other indirect users,disassociate from any attempts to disclose misleading information,11/26/2024,14,Confidentiality,have a duty to refrain from disclosing confidential information,Competence,have a duty to perform their professional duties according to high ethical standards,stay current with changes in the profession,not abuse power,have an ethical obligation to maintain both technical competence and moral competence,11/26/2024,15,Objectivity,fully disclose all relevant information that is objective for users to rely on its accuracy when making investment and credit decisions.,11/26/2024,16,