Accounting A100
Intro to accounting
Business Activites
Financing
Investing
Operating
Types of Financing
Equity investors:
Stockholders
Hope to receive dividends or increase in stock price—no guarantees!
Public versus private company
Debt investors:
Creditors of the business
Expect principal and interest payments
SEC (Securites and exchange commission)
Established in 1933
Requires of public companies:
Form 10-K (annually)
Form 10-Q (quarterly)
Audited financial statements (annually) by an “independent auditor”
Financial Statements
Prepared at regular time periods and at least annually
Prepared by management to go to any interested parties
Audited by outside, independent auditors
Independent of the company they are auditing
Examine the financial statements that management has prepared
Issue an opinion to stockholders, creditors, and any other interested parties
Generally accepted accounting principles (GAAP)
The accounting standard that companies based in the United States are required to use.
Standards give statements credibility and allow reports of different companies to be compared.
The responsibility of the Financial Accounting Standards Board (FASB).
The result of input from SEC, FASB, Congress, the White House, other government agencies, public hearings and letters from interested parties.
Rules based
International Financial Reporting Standards (IFRS)
Accounting standards used in more than 100 other countries.
The responsibility of the International Accounting Standards Board (IASB).
Becoming more accepted in the United States.
Principle based
According to GAAP and IFRS, every company must present four financial statements:
Balance Sheet
Assets = Liabilities + Stockholders Equity
Assets are what you own
Liabilities are what you owe
Equity represents owners’ interest in the assets
Income Statement
Income=Revenue-Expenses
The income statement covers a period of time
Do not roll over
Statement of Retained Earnings
Beginning
Business Activites
Financing
Investing
Operating
Types of Financing
Equity investors:
Stockholders
Hope to receive dividends or increase in stock price—no guarantees!
Public versus private company
Debt investors:
Creditors of the business
Expect principal and interest payments
SEC (Securites and exchange commission)
Established in 1933
Requires of public companies:
Form 10-K (annually)
Form 10-Q (quarterly)
Audited financial statements (annually) by an “independent auditor”
Financial Statements
Prepared at regular time periods and at least annually
Prepared by management to go to any interested parties
Audited by outside, independent auditors
Independent of the company they are auditing
Examine the financial statements that management has prepared
Issue an opinion to stockholders, creditors, and any other interested parties
Generally accepted accounting principles (GAAP)
The accounting standard that companies based in the United States are required to use.
Standards give statements credibility and allow reports of different companies to be compared.
The responsibility of the Financial Accounting Standards Board (FASB).
The result of input from SEC, FASB, Congress, the White House, other government agencies, public hearings and letters from interested parties.
Rules based
International Financial Reporting Standards (IFRS)
Accounting standards used in more than 100 other countries.
The responsibility of the International Accounting Standards Board (IASB).
Becoming more accepted in the United States.
Principle based
According to GAAP and IFRS, every company must present four financial statements:
Balance Sheet
Assets = Liabilities + Stockholders Equity
Assets are what you own
Liabilities are what you owe
Equity represents owners’ interest in the assets
Income Statement
Income=Revenue-Expenses
The income statement covers a period of time
Do not roll over
Statement of Retained Earnings
Beginning