Accounting Principles Accounting in Action参考.pptx

;;Accounting consists of three basic activities—it identifies, records, and communicates the economic events of an organization to interested users. ;Illustration 1-1 The activities of the accounting process;INTERNAL USERS;LO 1 ;LO 1 ;1;Ethics in Financial Reporting;;Ethics are the standards of conduct by which ones actions are judged as: right or wrong. honest or dishonest. fair or not fair. all of these options.;LO 2 ;Various users need financial information;Generally Accepted Accounting Principles (GAAP) – Standards that are generally accepted and universally practiced. These standards indicate how to report economic events.;;MONETARY UNIT ASSUMPTION requires that companies include in the accounting records only transaction data that can be expressed in terms of money. ECONOMIC ENTITY ASSUMPTION requires that activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities. Proprietorship Partnership Corporation;Proprietorship;Question;A business organized as a separate legal entity under state law having ownership divided into shares of stock is a proprietorship. partnership. corporation. sole proprietorship.;Indicate whether each of the following statements presented below is true or false.;Relevance means that financial information matches what really happened; the information is factual. A business owner’s personal expenses must be separated from expenses of the business to comply with accounting’s economic entity assumption.;Assets;Assets;;;Investments by owner are the assets the owner puts into the business. Revenues result from business activities entered into for the purpose of earning income. Common sources of revenue are: sales, fees, services, commissions, interest, dividends, royalties, and rent.;Drawings An owner may withdraw cash or other assets for personal use. Expenses are the cost of assets consumed or services used in the process of earning revenue. Common expenses are: sa