Survey of accounting 6e chapter 2

Basic Accounting Concepts Chapter ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Learning Objectives After studying this chapter, you should be able to: •Describe the basic elements of a financial accounting system •Analyze, record, and summarize transactions for a corporation’s first period of operations •Prepare financial statements for a corporation’s first period of operations •Analyze, record, and summarize transactions for a corporation’s second period of operations •Prepare financial statements for a corporation’s second period of operations ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Learning Objective Describe the basic elements of a financial accounting system ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Basic Rules of an Accounting System Rules determine: transactions are to be recorded _ transactions are to be recorded _ transactions are to be recorded of the transaction to be recorded • A transaction is an that can affect one, two or more items in the ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Framework of an Accounting System The Accounting Equation _ = _ + ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Integrated Financial Statement Framework: Template • By expanding the accounting equation, transactions can be analyzed, summarized, and recorded within the integrated financial statement framework Exhibit 1: Integrated Financial Statement Framework Impact of transaction on _ Impact of transaction on ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Controls of an Accounting System THE ACCOUNTING EQUATION MUST BALANCE Ending Cash on _ _ = Ending Cash on _ Net Income on Income Statement = Net Effects of _/ _ on _ ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Learning Objective Analyze, record, and summarize transactions for a corporation’s first period of operations ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Integrated Financial Statement Framework: Starting Family Health Care, P.C • Dr Landry invests $6,000 to start a practice ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Integrated Financial Statement Framework: Borrowing Money • Family Health Care, P.C borrows $10,000 from First National Bank ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Income Statement Exhibit 4: Family Health Care Financial Statements for September ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Retained Earnings Statement Exhibit 4: Family Health Care Financial Statements for September ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Balance Sheet Exhibit 4: Family Health Care Financial Statements for September ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Statement of Cash Flows Exhibit 4: Family Health Care Financial Statements for September ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Integrated Financial Statements Exhibit 5: Family Health Care Integrated Financial Statements for September ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Learning Objective Analyze, record, and summarize transactions for a corporation's second period of operations ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Summary of October Transactions ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Learning Objective Prepare financial statements for a corporation’s second period of operations ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Summary of October Transactions ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Income Statement Exhibit 7: Family Health Care Financial Statements for October ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Retained Earnings Statement Exhibit 7: Family Health Care Financial Statements for October ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Balance Sheet Exhibit 7: Family Health Care Financial Statements for October ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Statement of Cash Flows Exhibit 7: Family Health Care Financial Statements for October ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Exhibit 7: Family Health Care Integrated Financial Statements for October ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part End of Chapter ©2013 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part ... studying this chapter, you should be able to: •Describe the basic elements of a financial accounting system •Analyze, record, and summarize transactions for a corporation’s first period of operations... period of operations •Analyze, record, and summarize transactions for a corporation’s second period of operations •Prepare financial statements for a corporation’s second period of operations 20 13... 20 13 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part Framework of an Accounting System The Accounting