TAILIEUCHUNG - Lecture Intermediate accounting - Chapter 2: Review of the accounting process

Chapter 1 stressed the importance of financial statements in helping investors and creditors predict future cash flows. The balance sheet, along with accompanying disclosures, provides relevant information useful in helping investors and creditors not only to predict future cash flows, but also to make the related assessments of liquidity and long-term solvency. The purpose of this chapter is to provide an overview of the balance sheet and financial disclosures and to explore how this information is used by decision makers. | Review of the Accounting Process Chapter 2 Chapter 2: Review of the Accounting Process Chapter 1 explained that the primary means of conveying financial information to investors, creditors, and other external users is through financial statements and related notes. The purpose of this chapter is to review the fundamental accounting process used to produce the financial statements. This review establishes a framework for the study of the concepts covered in intermediate accounting. Actual accounting systems differ significantly from company to company. This chapter focuses on the many features that tend to be common to any accounting system. The Accounting Equation A = L + OE - Owner Withdrawals + Owner Investments - Expenses - Losses + Revenues + Gains The first objective of any accounting system is to identify the economic events that can be expressed in financial terms by the system. The accounting equation underlies the process used to capture the effects of economic events. Assets equal liabilities plus owners’ equity. This general expression portrays the equality between the total economic resources of an entity (assets) and the total claims to those resources (liabilities and equity). The equation also implies that each economic event affecting this equation will have a dual effect because resources must always equal claims to those resources. The accounting equation can be expanded to include a column for each type of change in owners’ equity, as illustrated here. Accounting Equation for a Corporation A = L + SE + Retained Earnings + Paid-in Capital - Expenses - Losses + Revenues + Gains - Dividends Owners of a corporation are its shareholders, so owners’ equity for a corporation is referred to as shareholders’ equity. Shareholders’ equity for a corporation arises primarily from two sources: (1) amounts invested by shareholders in the corporation and (2) amounts earned by the corporation (on behalf of its shareholders). These are reported as (1) paid-in .

• Kế toán - Kiểm toán
• Intermediate accounting
• Lecture Intermediate accounting
• Financial Accounting
• Accounting process
• Accounting equation
• Accounting processing cycle
• Stock issuance
• Estimating reserves
• Liquidating dividends
• Accounting changes
• Error corrections
• Accounting choices
• Theoretical structure
• Accrual accounting
• Financial accounting environment
• Accounting for leases
• Leasing environment
• Accounting by lessee
• Special accounting problems
• Cash versus accrual accounting
• International standard setting
• Accounting standards
• Accounting assists
• The challenges facing accounting
• Income taxes
• Accounting for income taxes
• Deferred tax liabilities
• Error analysis
• Accounting policy
• Accounting estimate
• Accounting policies
• Financial reporting
• Accounting information system
• Measurement issues
• Characteristics of accounting
• Capital allocation process