Accounting and Its Environment

By Sandra Gonzales,2014-09-28 13:06
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Accounting and Its Environment

     Accounting and Its Environment

    Develop an accounting vocabulary for decision making. Accounting is a system for measuring, processing, and communicating financial information. As the language

    of business, accounting helps a wide range of decision makers. Accounting dates backs to ancient civilizations, but its importance to society has been greatest since the Industrial revolution.

    Apply accounting concepts and principles to analyze business transactions. The three basic forms of business organization are the proprietorship, the partnership, and the corporation. Whatever the form, accountants use the entity concept to keep the businesss records separate from the personal records of the people who run it. Accountants at all levels must be ethical to serve their intended purpose. Generally accepted accounting principles (GAAP) guide accountants in their work. Among these guidelines are the entity concept, the reliability principle, the cost principle, the going-concern concept, and the stablemonetary-unit concept.

Use the accounting equation to describe an organizations financial position. In

    its most common form, the accounting equation is Assets=Liabilities + Owners Equity.

    Use the accounting equation to analyze business transactions. Transactions affects a businesss assets, liabilities, and owners equity. Therefore, transactions are

    analyzed in terms of their effect on the accounting equation.

    Prepare the financial statements. The financial statements communicate information for decision making by the entitys managers, owners, and creditors and by government agencies. The income statement presents a video of the entitys operations in terms

    of revenues earned and expenses incurred during a specific period. Total revenues minus total expenses equal net income. Net income or net loss answers the question, How much income did the entity earn, or How much loss did it incur during the period? The statement of owners equity reports the changes in owners equity during the

    period. The balance sheet provides a photograph of the entitys financial standing

    in terms of its assets, liabilities, and owners equity at a specific time. It answers

    the question, What is the entitys financial position? The statement of cash flows

    reports the cash coming in and the cash going out during the period. It answers, Where did cash come from , and, Where did it go?

    Evaluate the performance of a business. High net income indicates success in business; net loss indicates a bad year.

New words

accounting 会计学?结算

measure 估量?衡量?计算

process 初步分类?整理

    apply to •••应用于

transaction 交易

principle 原理

    proprietorship 独资企业?所有权

    partnership 合伙关系?合伙企业

corporation 公司?企业

entity 实体?统一的?权益

ethical 合乎道德的

intended 预期的

GAAP 普通会计原理

guideline 方针?指南

entity concept 主体概念

    reliability principal 可信性原则

cost principal 成本原则 going-concern concept 持续经营概念

stable-money-unit concept 稳定货币单位的概念

equation 等式

    owners equity 投资者权益

    financial statement 财政报表

agency 机构

    income statement 损益报表

video 说明

revenues 总收入

incurrent 遭受

minus 减去

    balance sheet 资产负债表?决算表

    indicate 表明?暗示

expenses 开支?消费

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