TAILIEUCHUNG - Lecture Intermediate accounting: IFRS edition - Chapter 2: RevieW of the accounting process

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. | REVIEW OF THE ACCOUNTING PROCESS Chapter 2 © 2013 The McGraw-Hill Companies, Inc. Chapter 2: Review of the Accounting Process The Accounting Equation A = L + OE - Owner Withdrawals + Owner Investments - Expenses - Losses + Revenue + Gains The accounting equation underlies the process used to capture the effects of economic events. Assets equal liabilities plus owners’ equity. Each event, or transaction, has a dual effect on the accounting equation. Accounting Equation for a Corporation A = L + SE + Retained Earnings + Issued Capital - Expenses - Losses + Revenues + Gains - Dividends Owners’ equity for a corporation, called shareholders’ equity, is classified by source as either issued capital or retained earnings. Retained earnings equals net income less distributions to shareholders (primarily dividends) since the inception of the corporation. Account Relationships Debits and credits affect the Statement of Financial Position Model as follows: A = L + PIC + RE Assets Dr. + Cr. - Liabilities Dr. - Cr. + Issued Capital Dr. - Cr. + Retained Earnings Dr. - Cr. + Revenues and Gains Dr. - Cr. + Expenses and Losses Dr. + Cr. - Permanent Accounts Temporary Accounts Part I The double-entry system is used to process transactions. In the double-entry system, debit means left side of an account and credit means right side of an account. Whether a debit or a credit represents an increase or decrease depends on the type of account. Accounts on the left side of the accounting equation (assets) are increased by debit entries and decreased by credit entries. Accounts on the right side of the equation (liabilities and shareholders’ equity) are increased by credit entries and decreased by debit entries. This arbitrary, but effective, procedure ensures that for each transaction the net impact on the left sides of the accounts always equals the net impact on the right sides of accounts. Part II Notice that increases and decreases in retained earnings are recorded .

• 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