Let’s go ahead and go through the very first slide for chapter one, and that is going to be kind of the definition of accounting. So we’ve got built in growth assumptions. Most of you are probably familiar with the concept of a purchase return. Any questions on that? But here you see it means very, very different things. You want a company that is fairly immune to what is going on in the world and I’ll use my Coca Cola example. These companies have big budgets and a big team of consultants who analyzes the total cost and ROI of sending their financial and accounting work to the service providers in offshore locations.
Financial accounting deals with financial transactions which are quantifiable in nature and the transactions are recorded on a historical basis. Let see if I can just lay that over. So now what does my balance sheet look like? You need little containers and perhaps some napkins and you need enough supplies to let’s say have 50 gallons of lemonade in our start of our business.
You will want ABC Company to earn you a profit while using as little assets as reasonably possible, right? If everything goes well then based on these details a strong accounting backbone can be achieved. They open up these little build these little boxes. So these are some of the key criteria to think about. Debit card sales are recorded the same as cash sales. The stocks are liquid, so you can change your mind if you want to sell.
The industry of business process outsourcing have grown up really high, with a lot of money turnover happening. Adapting to change impacts a company’s ability to capture and hold onto its market, grow its business and profitably sell its products and services. So I got a really good feeling for how everything fits together and how accounting impacts the organization. “I still have the first dollar I ever made. But the IRS has all the rest!.”
Alright so any questions on those two? In this case we recorded $500 too much for a payment. Now you might say now wait a minute Krug I remember that quiz you told us revenues caused equity to increase and expenses caused it to decrease right.
They are items that have value and will provide benefit into the future. Another good example might be a candy business. These are bad checks our customers wrote us and we originally deposited. But it would be nice if we could assume that almost everybody involved in the accounting measurement process was highly motivated to avoid errors. Again if you’re going to compound your money at a 10 or 15 percent return over a 43 year period of time you really want a business that you can own forever. Finding credit union therefore, is a highly needed factor.
Did you know that Small Business and finance is a fundamental part of how business is done around the world. And, Accounting is the process by which financial information about a business is recorded, classified, summarized, interpreted, and communicated.
In financial accounting the main concerns taken up are the accounting equation i.e. assets equal sum of liabilities and owner’s’ equity and the financial statements. The world’s population is growing. Service revenue is earned by performing service. That’s actually quite a high number. Okay, we want a heading for assets, I’m going to enter that in.
But before we do that, there’s a very important concept that we need to be aware of, using the periodic methods. So make sure you remember that stock dividends don’t change total stockholders’ equity like cash dividends do. This is known as double-entry accounting. You can see that revenues and gains which will learn about later, are all listed together – same with expenses. The journal entry to record the payment of $150 of freight charges is a debt to inventory and a credit to cash.
Financial Accounting: Stock Splits