太原工业学院管理工程系会计学原理英文课件CHAPTER2 Financial Statements and Accounting Transactions.pptVIP

Chapter 2Accounting Standards New words and terms Accounting practice guideline Accounting theory Accounting principle directive GAAP Generally Accepted Accounting Principles 2.1 Accounting Assumption Accounting Entity Assumption Going Concern Assumption The Stable Monetary Unit Assumption Accounting Period Assumption New words and terms accountability foreseeable future supplies market value historical cost reliable accounting measure interested party New words and terms quantitative data inflation add subtract measure eventual liquidation 2.2 Accounting Basis Cash-basis Accrual- basis 2.2 Accounting Basis Exercise for 2.2 Accounting Basis In the first year of operations, A co. earned 39,000 in revenues and received 33,000 cash from customers. The company incured expenses of 22,500, but had not paid for 2,250 of them at year-end. In addition, A co. prepaid 3,750 for expense that would be incurred the next year. Calculate the first year’s net income under Cash-basis and Accrual-basis. New words and terms Cash receipt Cash payment expenses receivables payables depreciation incure (expense) New words and terms journal earn revenue recognition concept on account prepaid 2.3 Accounting Principle The cost principle The realization principle The matching principle The objective principle The full disclosur principle The materiablity principle The consistency principle Conservatism principle New words and terms acquisition cost actual cost historical cost ship goods render service realized revenue reliable data accurat New words and terms outsider----insider knowledgeable decision= informed decision significant consistent valuation alternative overstate * * Revenue earned Expenses incured Cash receipt Cash payment Accrual- basis Cash- basis *