会计英语Unit2 Accounting Elements Accounting Equation.ppt

Unit 2Accounting Elements Accounting Equation Accounting Elements Assets Intangible assets: Patent, Copyrights, Franchises, Trademarks, Goodwill Liabilities Owner’s equity Revenues Expenses Profit Profit refers to the operating results of a business for a period of time. It is an important index for evaluating managers. Accounting Equation It shows the relationship among assets, liabilities, owner’s equity, revenues, expenses and profit. It reflect the rule of firm’s economic activities and usage of capital. It lays the theoretical foundation for accounting practice and is extremely important for both the double-entry system and the preparation of financial statements. Accounting Equation At a specific time Assets = Claims Accounting Equation Assets Accounting Equation Cash Assets + Expenses = Liabilities +Owner’s equity + Revenues Comprehensive Accounting Equation Example 1.Invested $100,000 to open the pet store on January 1, 2009. 2.On January 2, 2009, Richard paid $1,350 rent. 3.On January 3, 2009, Richard borrowed $50,000 by signing a 4-month,10% notes payable. 4. On January 3, 2009, Richard purchased pet store equipment for $7,500 in cash. 5. On January 4, 2009, Richard hired two people in the store for a monthly salary of $800 each. 6. On January 10,2009, Richard receives a cash advance of $1,200 from a customer for a parrot. Example 7.On January 11, 2009, Richard received $5, 500 in cash for two lizards sold to a customer. 8.On January 13, 2009, Richard purchased pet supplies on account at a cost of $500 from Molley pet supply store. 9. On January 17, 2009, Richard declared and paid a dividend to stockholders of $400. 10. On January 31, 2009, Richard purchased a 3-year insurance policy costing $2,400 that will expire on January 31 of 2011. 11. On January 31, 2009, Richard paid the employees monthly salaries. Answer 1.Invested $100,000 to open the pet store on January 1,2009. Cash↑ Paid-in capital ↑ 2.On January 2,2009,Richard paid $1,350