“Principles of Accounting” Class! Assalomu Alaykum & 안녕하세요! (Annyong-Haseyo!) Today’s Lecture

Part 4

Textbook(‘Weygandt’, 12th Ed.)

Class Description

WK

Date

Method

Final Exam or Final H/W Assignment

16

01.11

TBD

Mid-Term Exam or Midterm H/W Assignment

8

11.16

TBD

Part #1

Accounting

in General

Ch.#01(P2~47)

Intro. to the course & Accounting in Action

1

09.28

Online

Ch.#02(P48~91)

The Recording Process (Part 1)

The Recording Process (Part 2)

2

3

10.05

10.12

Online

Online

Plant Assets and Intangible Assets (Part 2)

15

01.04

Online

Plant Assets and Intangible Assets (Part 1)

14

12.28

Online

Ch.#10(P442~489)

Part #2

Assets

Completing the Accounting Cycle (Part 1)

Completing the Accounting Cycle (Part 2)

6

7

11.02

11.09

Online

Online

Ch.#04(P148~205)

Ch.#03(P92~147)

Adjusting the Accounts (Part 1)

5

4

10.26

10.19

Online

Online

Adjusting the Accounts (Part 2)

Ch.#05(P206~261)

Accounting for Merchandising Operation

9

11.23

Online

Ch.#06(P262~309)

Inventories

10

11.30

Online

Cash

11

12.07

Online

Ch.#08(P354~403)

Accounting for Receivables (Part 2)

12

13

12.14

12.21

Online

Online

Accounting for Receivables (Part 1)

Ch.#09(P404~441)

This schedule is subject to change

Others

Part 5

• If a class is expected to be delayed due to an unavoidable situation, I will let you know in advance and I will try my best to get it uploaded as quickly as possible

“Delayed” class

• Professor Students: I will contact you basically through e-Class and/or through TA.
• I will let you know the information of my TA by next week
• Students Professor: If you have any questions or problems, you can contact me by email ([e-mail])

Communication Contact

Low/High

High/High

Low/Low

High/Low

Accounting Knowledge

English

Proficiency

Common

Denominator

… and last but not least!

Your cooperation and understanding will be appreciated!

End of Video 1 out of 3

Beginning of Video 2 out of 3

Biz Transactions & Equation (P14)

LO 4

Ethics, Principles, Assumptions (P7)

LO 2

Acct. Equation & Components (P12)

LO 3

Activities and Users (P4)

LO 1

Four Financial Statements (P21)

LO 5

W2

Accounting in Action - 1 (P4)

Ch.01

W1

Financial Statements Samples(Balance Sheet & Income Statement)

Liabilities

Share-holders’

Equity

Assets

Financial Statements

Balance Sheet

(Statement of Financial Position)

Income Statement

Statement of

Cash Flows

Statement of Changes in Equity

Costs

Net Income

Revenues

“Do you like playing a PUZZLE?”

“Accounting is same as playing a PUZZLE with numbers!”

“It is very exciting and lots of fun!”

“Try to enjoy this semester!”

• I know that some of you are not interested in being an accountant.

• Then, you might be thinking, “If I’m not going to be an accountant, why do I need to know accounting?”

• Well, consider this quote from a well-known business person:

• Whatever your personal goals or occupation, the need for financial information is inescapable. You cannot earn a living, spend money, buy on credit, make an investment, or pay taxes without receiving, using, or dispensing financial information. Good decision-making depends on good information.

“To be good at your business, you have to know the numbers.”

• In business, accounting and financial statements are the means for communicating the numbers. If you don’t know how to read financial statements, you can’t really know your business.

In this textbook, you will learn how to read and prepare financial statements

Activities and Users (P4)

LO 1

Who Uses Accounting Data? (P5)

B

Three Activities (P4)

A

Three Activities (P4)

A

• Accounting consists of 3 basic activities - it identifies, records, and communicates the economic events of an organization to interested users.

• The economic events relevant to its business.

• A systematic, chronological order
• Measured in SOUM(UZS)
• Classified and summarized

• A firm communicates the collected information to interested users by means of accounting reports financial statements, prepared in a standardized way.

Illustration 1-1 Three Activities of the Accounting Process

Recording

Identification

Communication

Bookkeeping

Accounting

Bookkeeping

Who Uses Accounting Data? (P5)

B

Internal Users (P5)

a

External Users (P6)

b

Internal Users (P5)

a

• To answer these and other questions, internal users need detailed information on a timely basis.

Illustration 1-2 Who are the internal users and what they need to know about?

Managerial accounting

• It provides internal reports to help users make decisions about their companies.

External Users (P6)

b

• Investors (shareholders or owners) use accounting information to decide whether to buy, hold, or sell ownership shares of a company.

Financial accounting

• It provides economic and financial information for investors, creditors, taxing authorities, regulatory agencies, customers, labor unions, etc.

Illustration 1-3 Who are the external users and what they need to know about?

• Creditors (such as suppliers and bankers) use accounting information to evaluate the risks of granting credit or lending money.

A Firm

Stock

Price

Book

Value

Intrinsic Value

“Real Value”

Market

Value

Related

Related

Lia-bilities

Assets

Balance Sheet

Share-holders’

Equity

Reflects

the future value as well

Preparing and analyzing the financial statements is very important part of the business

Historical cost and numbers

End of Video 2 out of 3

Beginning of Video 3 out of 3

Acct. Equation & Components (P12)

LO 3

Liabilities (P12)

B

Assets (P12)

A

An Overview (P12)

*

Owner’s Equity (P13)

C

An Overview (P12)

*

2 basic elements of a business

What it owns

What it owes

Illustration 1-5 The Basic Acct. Equation

Assets

Liabilities

Owner’s Eqty.

• We can express the relationship of assets, liabilities, and owner’s equity as an equation.

S/holder’s

(Owner’s)

Equity

Assets

Liabilities

What

it owes to creditors

What’s

left to owners

Debit(Dr.)

Credit(Cr.)

Balance Sheet is the financial statement which contains that information

What

it owns

Assets (P12)

A

Balance Sheet

S/holder’s

(Owner’s)

Equity

Liabilities

What

it owns

• The business uses its assets in carrying out such activities as production and sales.

Assets

Liabilities (P12)

B

• Liabilities are claims against assets - that is, existing debts and obligations.

Balance Sheet

S/holder’s

(Owner’s)

Equity

Assets

What

it owes to creditors

Liabilities

• The economic activities result in payables of various sorts:

• Accounts payable: A firm purchases products on credit from suppliers

• Note payable: A firm borrows money from a bank to purchase products

• Salaries and wages payable, taxes payable, etc.

• All of these persons or entities to whom a firm owes money are called creditors.

• Creditors may legally force the liquidation of a business if the firm does not pay its debts.

• In that case, the law requires that creditor claims be paid before ownership claims.

Owner’s Equity (P13)

C

Increases in Owner’s Equity (P13)

a

An Overview (P13)

*

Decreases in Owner’s Equity (P13)

b

• The ownership claim on total assets is owner’s equity.

• Since the claims of creditors must be paid before ownership claims, owner’s equity is often referred to as residual equity.

An Overview (P13)

*

Balance Sheet

Assets

Liabilities

What’s

left to owners

S/holder’s

(Owner’s)

Equity

• It is equal to total assets minus total liabilities.

• Owner’s Capital: Investments by owner

• Revenues: Generally, revenues result from selling merchandise, performing services, renting property, and lending money.

Increases in Owner’s Equity (P13)

a

Increase in

Owner’s Equity

Balance Sheet

S/holder’s

(Owner’s)

Equity

Assets

Liabilities

Liabilities

(Beginning)

Assets

(Beginning)

S/holders’

Equity

(Beginning)

Expenses

Net Income

Revenue

Income Statement

For the period ended

Dec 31st, 2020

Dividend

Retained

Earnings

Retained

Earnings

(2020)

During

the year

At year end

Liabilities

(Beginning)

Assets

(Beginning)

Balance Sheet

At the beginning of the fiscal year(Jan 1st, 2020)

S/holders’

Equity

(Beginning)

S/holders’

Equity

(Ending)

Balance Sheet

At the end of the fiscal year(Dec 31st, 2020)

Assets

(Ending)

Current Year

Liabilities

(Beginning)

S/holders’

Equity

(Beginning)

Balance Sheet

At the beginning of the fiscal year(Jan 1st, 2021)

Assets

(Beginning)

Following Year

Decreases in Owner’s Equity (P13)

a

Decrease in

Owner’s Equity

Balance Sheet

S/holder’s

(Owner’s)

Equity

Assets

Liabilities

• Owner’s Drawings: An owner may withdraw cash or other assets for personal use.

• Expenses: The cost of assets consumed or services used in the process of earning revenue.

Owner’s Capital

Owner’s Drawings

Illustration 1-5 The Basic Acct. Equation

Assets

Liabilities

Owner’s Eqty.

Owner’s Capital

Revenues

Increase in Owner’s Equity

Decrease in Owner’s Equity

Illustration 1-6 The Expanded Equation

Assets

Liabilities

Owner’s Equity

Owner’s Drawings

Expenses

Revenues

Expenses

Asset(+)

Asset(-)

Liabilities(-)

Liabilities(+)

O/Equity(-)

O/Equity(+)

Debit(Dr.)

Credit(Cr.)

Balance Sheet

Assets

Liabilities

Owner’s Capital

Owner’s Drawings

Revenues

Expenses

This is it for today. If you have any questions, send me an email

See you next week!

Stay safe & Peace!

End of Video 3 out of 3