TAILIEUCHUNG - Lecture Fundamentals of financial accounting (3e): Chapter 1 - Phillips, Libby, Libby
Chapter 1 - Business decision and financial accounting. If you think accounting is far removed from your personal life, you might be in for a surprise. Your ordinary life experiences, especially as a student, actually prepare you well to learn accounting. This chapter focuses on the key financial reports that business people rely on when evaluating a company’s performance. | Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Fundamentals of Financial Accounting 3e by Phillips, Libby, and Libby. Chapter 1 Business Decisions and Financial Accounting PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Fred Phillips, ., CA Chapter 1: Business Decision and Financial Accounting Organizational Forms Sole Proprietorship Business organization owned by one person. The owner is personally liable for all debts of the business. 1- Part I There are three types of business organizations. A sole proprietorship is a business organization owned by one person. The owner is personally liable for all the debts of the business. Part II A partnership is a business organization owned by two or more people. Each partner is personally liable for all the debts of the business. Part III A corporation operates a business separate from its owners from both a legal and accounting perspective. Owners of corporations (often called stockholders) are not personally responsible for debts of the corporation. Corporations may be either public companies or private companies. Public companies have their stock bought and sold on stock exchanges. Private companies have their stock bought and sold privately. Most corporations start out as private companies and will become public companies if they need a lot of financing, which they obtain from selling new stock certificates to investors. Some big name corporations, like Cargill and Chick-Fil-A, haven’t gone public because they get enough financing from private sources. The Accounting System Business and Financing Activities Accounting System Accounting Reports Financial Managerial External users (creditors, investors, etc.) Internal users (managers, etc.) Accounting is a system of analyzing, recording, summarizing and reporting the results of a business’s activities. 1- Part I Most companies exist to earn .
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