kimmel financial 6e powerpoint ch01

8/12/2019 Kimmel Financial 6e PowerPoint Ch01

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1. Describe the primary forms of business organization.

2. Identify the users and uses of accounting information.

3. Explain the three principal types of business activity.

4. Describe the content and purpose of each of the financial

statements.

. Explain the meaning of assets! liabilities! and stoc"holders#

e$uity! and state the basic accounting e$uation.

%. Describe the components that supplement the financial

statements in an annual report.

Stud! O"#$cti%$&Stud! O"#$cti%$&

Stud! O"#$cti%$&Stud! O"#$cti%$&


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Internal usersExternal users

Ethics in financial

reporting

Fo()& o*Fo()& o*

+u&in$&&+u&in$&&

O(ganiationO(ganiation

Fo()& o*Fo()& o*

+u&in$&&+u&in$&&

O(ganiationO(ganiation

U&$(& and U&$&U&$(& and U&$&

o* Financialo* Financial

In*o()ationIn*o()ation

U&$(& and U&$&U&$(& and U&$&

o* Financialo* Financial

In*o()ationIn*o()ation

+u&in$&&+u&in$&&

Acti%iti$&Acti%iti$&

+u&in$&&+u&in$&&

Acti%iti$&Acti%iti$&Co))unicatingCo))unicating

ith U&$(&ith U&$(&

Co))unicatingCo))unicating

ith U&$(&ith U&$(&

&oleproprietorship

'artnership

(orporation

)inancingInvesting

*perating

Income statement+etained earnings

statement

,alance sheet

&tatement of cash

flo-s

Interrelationshipsof statements

*ther elements of

an annual report

Int(oduction to Financial Stat$)$nt&Int(oduction to Financial Stat$)$nt&

Int(oduction to Financial Stat$)$nt&Int(oduction to Financial Stat$)$nt&


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/(o0(i$to(&hi0 /a(tn$(&hi0 Co(0o(ation

&imple to

establish &hared control

,roader s"ills

and resources

ax advantages

Easier to transfer

o-nership Easier to raise

funds

/o personal

liability

Fo()& o* +u&in$&& O(ganiationFo()& o* +u&in$&& O(ganiation

Fo()& o* +u&in$&& O(ganiationFo()& o* +u&in$&& O(ganiation

0enerally o-ned

by one person

&imple to

establish

*-ner

controlled

ax advantages

SO 1 Describe the primary forms of business organization.SO 1 Describe the primary forms of business organization.


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Manag$)$nt

u)an

R$&ou(c$&Taxing

Autho(iti$&

La"o(Union&

R$gulato(!

Ag$nci$&

Ma(3$ting

Financ$

In%$&to(&

C($dito(&

Cu&to)$(&

Int$(nal

U&$(&

Ext$(nal

U&$(&

4ho U&$& Accounting Data

U&$(& and U&$& o* Financial In*o()ationU&$(& and U&$& o* Financial In*o()ation

U&$(& and U&$& o* Financial In*o()ationU&$(& and U&$& o* Financial In*o()ation

SO 2 Identify the users and uses of accounting information.SO 2 Identify the users and uses of accounting information.


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6u$&tion& A&3$d "!Int$(nal U&$(& U&$(

1. (an -e afford to give our

employees a pay raiseu)an R$&ou(c$&

2. hat price for our product

-ill maximize net income

3. hich product line is most

profitable

4. Is cash sufficient to pay

dividends to the stoc"holders

Ma(3$ting

Manag$)$nt

Financ$

U&$(& and U&$& o* Financial In*o()ationU&$(& and U&$& o* Financial In*o()ationU&$(& and U&$& o* Financial In*o()ationU&$(& and U&$& o* Financial In*o()ation



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6u$&tion& A&3$d "!Ext$(nal U&$(& U&$(

1. Is the company earning

satisfactory incomeIn%$&to(&

2. o- does Disney compare in

size and profitability -ith ime

arner

3. ill nited 5irlines be able to

pay its debts as they come

due

In%$&to(&

C($dito(&




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Ethic& In Financial R$0o(tingnited &tates regulators and la-ma"ers -ere very concerned

that the economy -ould suffer if investors lost confidence in

corporate accounting because of unethical financial reporting.

+ecent *inancial &candal&include6 En(on! 4o(ldCo)!

$althSouth! AI:! and others.

(ongress passed Sa("an$&-Oxl$! Act o* 2992.

Effective financial reporting depends on sound ethical

behavior.




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Illu&t(ation 1-

St$0& in anal!ing $thic& ca&$&


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hich of the follo-ing did not result from the &arbanes7

*xley 5ct

a. op management must no- certify the accuracy of

financial information.

b. 'enalties for fraudulent activity increased.

c. Independence of auditors increased.

d. ax rates on corporations increased.

6u$&tion




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5ll businesses are involved in three types of activity 8

financing!

investing!

and operating.

+u&in$&& Acti%iti$&+u&in$&& Acti%iti$&+u&in$&& Acti%iti$&+u&in$&& Acti%iti$&

SO 3 Explain the three principal types of business actiity.SO 3 Explain the three principal types of business actiity.

he accounting in*o()ation &!&t$)"eeps trac" of

the results of each of these business activities.


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To 0(i)a(! &ou(c$& o* out&id$ *und& a($;

1< +o((oing )on$!

5mounts o-ed are called lia"iliti$&.

'arty to -hom amounts are o-ed are c($dito(&.

Not$& 0a!a"l$and "ond& 0a!a"l$are different type

of liabilities.

2< I&&uing &ha($& o* &toc3 *o( ca&h


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In%$&ting Acti%iti$&

/u(cha&$ o* ($&ou(c$& a co)0an! n$$d& to

o0$(at$

kimmel financial 6e powerpoint ch01

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