会计英语 accounting in business1,2.ppt

* Here is a key summary of some of the various aspects of our three general type of businesses. Notice that a corporation is a separate legal entity. That means it can sue and be sued in court. If you wish to sue a partnership, you must sue all the individual partners. You should also be aware that a corporation is a separate taxable entity. The income or loss from proprietorships and partnerships are taxed as income or loss to the individuals involved. A corporation has a special tax return and tax schedule. A proprietorship or partnership may be set up as a limited liability corporation, or L L C. This form of business helps protect the assets of individual owners of the business entity. * Corporate owners are referred to as stockholders or shareholders because they own shares of Owner Capital. An Owner Capital certificate serves as an ownership document for a corporation. Sometimes we refer to Owner Capital as capital stock. The two terms may be used interchangeably. Congress passed the Sarbanes-Oxley Act to help curb financial abuses at companies that issue their stock to the public. Management must issue a report stating that internal control are effective. Auditors must verify the effectiveness of internal controls. Here is a list of companies and the alleged accounting abuses. Many of these company actions lead directly to the passing of the Sarbanes-Oxley Act. * * The basic accounting equation states that assets are equal to liabilities plus equity of a company. The equation makes sense because in a general way it states that assets must be equal to the claims against those assets. If you have an asset we can have two broad categories of claims against that asset. First, we may have claims by creditors (liabilities). Finally, after all creditor claims are satisfied, the residual owners, and stockholders, have a claim on those assets. * Assets may be viewed as resources owned or controlled by an entity. They include such items as cash, accounts receivable