AKUNTANSI KEUANGAN I OPENCOURSEWARE UNIVERSITAS PEMBANGUNAN JAYA 01

(1)

Learning Objectives

1. Nature of a Business

2. The Role of Accounting in Business

3. Business Ethics

4. Profession of Accounting

5. Generally Accepted Accounting Principles

6. Assets, Liabilities, and Owner’s Equity

7. Business Transactions

Power Notes

Introduction to Accounting and Business

(2)

• Accounting – An Information Process

• Users of Accounting Information

• Profession of Accounting

• The Accounting Equation

• Business Transactions

• Financial Statements

• Ratio of Liabilities to Owner’s Equity

Slide # Power Note Topics

Power Notes

Introduction to Accounting and Business

Chapter

1

3

9

11

16

19

53

70

(3)

Accounting — An Information Process

Identification of Users

(4)

User Information

Needs

Accounting — An Information Process

Identification of Users

(5)

Identification of Users

User Information

Needs

Accounting System

Accounting — An Information Process

(6)

Identification of Users

User Information

Needs

Accounting System

Economic Data and Activities

Accounting — An Information Process

(7)

Identification of Users

User Information

Needs

Accounting System

Economic Data and Activities

Accounting — An Information Process

(8)

Identification of Users

User Information

Needs

Accounting System

Economic Data and Activities

User

Accounting — An Information Process

(9)

EXTERNAL USERS

Financial Accounting

• _investors

• _creditors

• _regulators

• _customers

• _competitors

Users of Accounting Information

(10)

EXTERNAL USERS

Financial Accounting

• _investors

• _creditors

• regulators

• customers

• _competitors

• owners • managers • employees

INTERNAL USERS

Managerial

Accounting

Users of Accounting Information

(11)

Government

Industry

CPA Firms

The Accounting Profession

Auditor

_Accountant

Staff

Junior

(12)

Government

Industry

CPA Firms

Staff

Accountant

_Accountant

Junior

Auditor

The Accounting Profession

Senior

Accountant

Supervisor

Chief

(13)

Government

Industry

CPA Firms

Chief

Accountant

Staff

Accountant

Senior

Accountant

Junior

Accountant

Supervisor

Auditor

The Accounting Profession

Controller

Manager

(14)

Government

Administrator

Industry

Vice President

Finance

CPA Firms

Chief

Accountant

Staff

Accountant

Controller

Partner

Manager

Senior

Accountant

Junior

Accountant

Director

Supervisor

Auditor

The Accounting Profession

(15)

Government

The Accounting Profession

Administrator

Industry

Vice President

Finance

CPA Firms

Chief

Accountant

Staff

Accountant

Controller

Partner

Manager

Senior

Accountant

Junior

Accountant

Director

Supervisor

Auditor

(16)

Resources

The Accounting Equation

(17)

Assets

Resources = Sources

The Accounting Equation

What are the

sources of the

assets?

Cost of

resources used

in the business

(18)

Assets

Liabilities

Owner’s

Equity

Resources = Sources

Cost of

resources used

in the business

Resources

supplied by

creditors and

owners

The Accounting Equation

(19)

a. Chris Clark deposits $25,000 in a bank account

for NetSolutions.

ASSETS

=

Business Transactions

OWNER’S EQUITY LIABILITIES

(20)

a. Chris Clark deposits $25,000 in a bank account

for NetSolutions.

ASSETS

=

Business Transactions

OWNER’S EQUITY

Cash

25,000

(21)

a. Chris Clark deposits $25,000 in a bank account

for NetSolutions.

ASSETS

=

Business Transactions

OWNER’S EQUITY

Cash

25,000

LIABILITIES

Chris Clark,

Capital

25,000

(22)

Business Transactions

b. NetSolutions buys land for $20,000.

ASSETS

=

_{OWNER’S EQUITY}

(23)

Business Transactions

b. NetSolutions buys land for $20,000.

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

(20,000)

(24)

Business Transactions

b. NetSolutions buys land for $20,000.

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

(20,000)

Land

20,000

(25)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

c. NetSolutions buys supplies for $1,350, agreeing to

pay the supplier in the near future.

(26)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Supplies

1,350

c. NetSolutions buys supplies for $1,350, agreeing to

pay the supplier in the near future.

(27)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

c. NetSolutions buys supplies for $1,350, agreeing to

pay the supplier in the near future.

Accounts Payable

1,350

Supplies

1,350

(28)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

(29)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

7,500

(30)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

7,500

Fees Earned

7,500

(31)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

e. NetSolutions paid: wages, $2,125; rent, $800;

utilities, $450; and miscellaneous, $275.

(32)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

(3,650)

e. NetSolutions paid: wages, $2,125; rent, $800;

utilities, $450; and miscellaneous, $275.

(33)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

(3,650)

Expenses

(3,650)

e. NetSolutions paid: wages, $2,125; rent, $800;

(34)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

(35)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

(950)

(36)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

(950)

Accounts Payable

(950)

(37)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

g. At the end of the month, the cost of supplies on

hand is $550.

(38)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Supplies

(800)

g. At the end of the month, the cost of supplies on

hand is $550.

(39)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Supplies

(800)

Supplies Expense

(800)

g. At the end of the month, the cost of supplies on

hand is $550.

(40)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

(41)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

(2,000)

(42)

Business Transactions

ASSETS

=

_{OWNER’S EQUITY}

LIABILITIES

Cash

(2,000)

Chris Clark,

Drawing

(2,000)

h. Chris Clark withdraws $2,000 in cash.

(43)

Transaction Summary

ASSETS

=

OWNER’S EQUITY

LIABILITIES

Cash

Cash 5,9005,900 Supplies

Supplies 550550 Land

(44)

Transaction Summary

ASSETS

=

OWNER’S EQUITY

LIABILITIES

Cash

Cash 5,9005,900 Supplies

Supplies 550550 Land

Land 20,00020,000

Accts. Payable

(45)

Transaction Summary

ASSETS

=

OWNER’S EQUITY

LIABILITIES

Cash

Cash 5,9005,900 Supplies

Supplies 550550 Land

Land 20,00020,000

Accts. Payable

Accts. Payable 400400

C. Clark, Capital

C. Clark, Capital 25,00025,000 C. Clark, Drawing

C. Clark, Drawing (2,000)(2,000) Fees Earned

Fees Earned 7,5007,500 Wages Expense

Wages Expense (2,125)(2,125) Rent Expense

Rent Expense (800)(800) Supplies Expense

Supplies Expense (800)(800) Utilities Expense

Utilities Expense (450)(450) Misc. Expense

(46)

OWNER’S EQUITY

Effects of Transactions on Owner’s Equity

(47)

OWNER’S EQUITY

Effects of Transactions on Owner’s Equity

decreased by

(48)

OWNER’S EQUITY

Effects of Transactions on Owner’s Equity

Owner’s withdrawals Expenses

decreased by

(49)

OWNER’S EQUITY

Effects of Transactions on Owner’s Equity

increased by

(50)

OWNER’S EQUITY

Effects of Transactions on Owner’s Equity

Owner’s investments Revenues

increased by

(51)

OWNER’S EQUITY

Effects of Transactions on Owner’s Equity

Owner’s withdrawals Expenses

Owner’s investments Revenues

decreased by

(52)

OWNER’S EQUITY

Effects of Transactions on Owner’s Equity

Owner’s withdrawals Expenses

Owner’s investments Revenues

decreased by

decreased by increased byincreased by

(53)

Financial Statements

NetSolutions Income Statement

For the Month Ended November 30, 2002

Fees earned $7,500

Operating expenses:

Wages expense $2,125

Rent expense 800

Supplies expense 800

Utilities expense 450

Miscellaneous expense 275

Total operating expenses 4,450

(54)

Financial Statements

NetSolutions Income Statement

For the Month Ended November 30, 2002

Fees earned $7,500

Operating expenses:

Wages expense $2,125

Rent expense 800

Supplies expense 800

Utilities expense 450

Miscellaneous expense 275

Total operating expenses 4,450

(55)

Financial Statements

NetSolutions Income Statement

For the Month Ended November 30, 2002

Fees earned $7,500

Operating expenses:

Wages expense $2,125

Rent expense 800

Supplies expense 800

Utilities expense 450

Miscellaneous expense 275

Total operating expenses 4,450

(56)

Financial Statements

NetSolutions Income Statement

For the Month Ended November 30, 2002

Fees earned $7,500

Operating expenses:

Wages expense $2,125

Rent expense 800

Supplies expense 800

Utilities expense 450

Miscellaneous expense 275

Total operating expenses 4,450

(57)

NetSolutions

Statement of Owner’s Equity

For the Month Ended November 30, 2002

Financial Statements

Chris Clark, capital, November 1, 2002 $ 0 Investment on November 1, 2002 $25,000

Net income for November 3,050

$28,050

Less withdrawals 2,000

Increase in owner’s equity 26,050

(58)

NetSolutions

Statement of Owner’s Equity

For the Month Ended November 30, 2002

Financial Statements

Chris Clark, capital, November 1, 2002 $ 0 Investment on November 1, 2002 $25,000

Net income for November 3,050

$28,050

Less withdrawals 2,000

Increase in owner’s equity 26,050

(59)

NetSolutions

Statement of Owner’s Equity

For the Month Ended November 30, 2002

Financial Statements

Chris Clark, capital, November 1, 2002 $ 0 Investment on November 1, 2002 $25,000

Net income for November 3,050

$28,050

Less withdrawals 2,000

Increase in owner’s equity 26,050

(60)

NetSolutions

Statement of Owner’s Equity

For the Month Ended November 30, 2002

Financial Statements

Chris Clark, capital, November 1, 2002 $ 0 Investment on November 1, 2002 $25,000

Net income for November 3,050

$28,050

Less withdrawals 2,000

Increase in owner’s equity 26,050

(61)

NetSolutions

Statement of Owner’s Equity

For the Month Ended November 30, 2002

Financial Statements

Chris Clark, capital, November 1, 2002 $ 0 Investment on November 1, 2002 $25,000

Net income for November 3,050

$28,050

Less withdrawals 2,000

Increase in owner’s equity 26,050

(62)

NetSolutions Balance Sheet November 30, 2002 Assets

Cash $5,900

Supplies 550

Land 20,000

Total assets $26,450

Liabilities

Accounts payable $ 400 Owner’s Equity

Chris Clark, capital 26,050 Total liabilities and

owner’s equity $26,450

Financial Statements

(63)

NetSolutions Balance Sheet November 30, 2002

Financial Statements

Assets

Cash $5,900

Supplies 550

Land 20,000

Total assets $26,450

Liabilities

Accounts payable $ 400 Owner’s Equity

Chris Clark, capital 26,050 Total liabilities and

(64)

NetSolutions Balance Sheet November 30, 2002

Financial Statements

Assets

Cash $5,900

Supplies 550

Land 20,000

Total assets $26,450

Liabilities

Accounts payable $ 400 Owner’s Equity

Chris Clark, capital 26,050 Total liabilities and

(65)

NetSolutions Balance Sheet November 30, 2002

Financial Statements

Assets

Cash $5,900

Supplies 550

Land 20,000

Total assets $26,450

Liabilities

Accounts payable $ 400 Owner’s Equity

Chris Clark, capital 26,050 Total liabilities and

(66)

NetSolutions

Statement of Cash Flows

For the Month Ended November 30, 2002 Cash flows from operating activities:

Cash received from customers $ 7,500 Deduct cash payments for expenses

and payments to creditors 4,600

Net cash flow from operating activities $ 2,900 Cash flows from investing activities:

Cash payments for acquisition of land (20,000) Cash flows from financing activities:

Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000

Financial Statements

(67)

NetSolutions

Statement of Cash Flows

For the Month Ended November 30, 2002

)

Financial Statements

Cash flows from operating activities:

Cash received from customers $ 7,500 Deduct cash payments for expenses

and payments to creditors 4,600

Net cash flow from operating activities $ 2,900 Cash flows from investing activities:

Cash payments for acquisition of land (20,000 Cash flows from financing activities:

Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000

(68)

NetSolutions

Statement of Cash Flows

For the Month Ended November 30, 2002

)

Financial Statements

Cash flows from operating activities:

Cash received from customers $ 7,500 Deduct cash payments for expenses

and payments to creditors 4,600

Net cash flow from operating activities $ 2,900 Cash flows from investing activities:

Cash payments for acquisition of land (20,000) Cash flows from financing activities:

Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000

(69)

NetSolutions

Statement of Cash Flows

For the Month Ended November 30, 2002

Financial Statements

Cash flows from operating activities:

Cash received from customers $ 7,500 Deduct cash payments for expenses

and payments to creditors 4,600

Net cash flow from operating activities $ 2,900 Cash flows from investing activities:

Cash payments for acquisition of land (20,000 Cash flows from financing activities:

Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000

(70)

Ratio of Liabilities to Owner’s Equity

Ratio of liabilities to owner’s equity

=

Formula

Objective:

Use the ratio of liabilities to owner’s equity to

analyze the ability of a business to withstand poor

business conditions and to pay its creditors.

Total liabilities Total owner’s equity

NetSolutions

₌

Example

$400

(71)

Note:

To see the topic slide, type 2 and press Enter.

This is the last slide in Chapter 1.

Power Notes

Chapter

1

(1)

C1 - 66 NetSolutions

Statement of Cash Flows

For the Month Ended November 30, 2002 Cash flows from operating activities:

Cash received from customers $ 7,500 Deduct cash payments for expenses

and payments to creditors 4,600

Net cash flow from operating activities $ 2,900 Cash flows from investing activities:

Cash payments for acquisition of land (20,000) Cash flows from financing activities:

Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000

Net cash flow from financing activities 23,000 Net cash flow and Nov. 30, 2002 cash balance $5,900

Financial Statements

(2)

NetSolutions

Statement of Cash Flows

For the Month Ended November 30, 2002

)

Financial Statements

Cash flows from operating activities:

Cash received from customers $ 7,500 Deduct cash payments for expenses

and payments to creditors 4,600

Net cash flow from operating activities $ 2,900 Cash flows from investing activities:

Cash payments for acquisition of land (20,000 Cash flows from financing activities:

Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000

Net cash flow from financing activities 23,000 Net cash flow and Nov. 30, 2002 cash balance $5,900

(3)

C1 - 68 NetSolutions

Statement of Cash Flows

For the Month Ended November 30, 2002

)

Financial Statements

Cash flows from operating activities:

Cash received from customers $ 7,500 Deduct cash payments for expenses

and payments to creditors 4,600

Net cash flow from operating activities $ 2,900 Cash flows from investing activities:

Cash payments for acquisition of land (20,000) Cash flows from financing activities:

Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000

Net cash flow from financing activities 23,000 Net cash flow and Nov. 30, 2002 cash balance $5,900

(4)

NetSolutions

Statement of Cash Flows

For the Month Ended November 30, 2002

Financial Statements

Cash flows from operating activities:

Cash received from customers $ 7,500 Deduct cash payments for expenses

and payments to creditors 4,600

Net cash flow from operating activities $ 2,900 Cash flows from investing activities:

Cash payments for acquisition of land (20,000 Cash flows from financing activities:

Cash received as owner’s investment $25,000 Deduct cash withdrawal by owner 2,000

Net cash flow from financing activities 23,000 Net cash flow and Nov. 30, 2002 cash balance $5,900 )

(5)

C1 - 70

Ratio of Liabilities to Owner’s Equity

Ratio of liabilities to owner’s equity

=

Formula

Objective: Use the ratio of liabilities to owner’s equity to

analyze the ability of a business to withstand poor

business conditions and to pay its creditors.

Total liabilities Total owner’s equity

NetSolutions

₌

Example

$400

(6)