What Accounting Principles GAAPGenerally Accepted Accounting Principles FASBFinancial

What Accounting Principles? GAAP=Generally Accepted Accounting Principles FASB=Financial Accounting Standards Board

Financial Statements: F S 1. Accounting period: 1. 1 beginning of year -12. 31 End of year 2. Financial Statements: Balance Sheet B/S : Financial Position Income Statement P/L: Operating Result Statement of cash flows C/S: Cash

B/S 31/12/2008 Liabilities ASSETS Debts of the Business CASH 300 LAND A Economic Resource Stockholders” Equity Net Assets. Capital 200 =500 Assets=Liabilities+ Stockholders” Equity=Assets-Liabilities

Income Statement P/L 1/1/2008— 31/12/2008 Expenses$800 Revenues$1000 Purchase Rent Expenses Interest Revenues Sale Rent revenues Interest Revenues NET INCOME$200 Revenues-E increase Expenses Not Accumulate

Statement of cash flows C/S: Cash 1/1/2008 Where is get cash What used to cash ========== +cash _cash

3. Bookkeeping: Management Record Journal Entry Debit Credit Assets Increase Assets decrease Liability decrease BS Item Liability Increase PL Item Expenses Revenues

Financial Report Process Transactions Journal entry Journal Posting Ledger Unadjusted Trial Balance Adjusted Entry Work Sheet Balance Sheet B/S Income Statement P/L

4. Cash Basis Cash Received Revenues Cash Paid Expenses Cash Basis Accounting Revenues incurred 서비스 제공시 분개없슴 Expenses incurred 서비스 받을때 분개없슴 Cash Paid Cash received (Dr)Cash 500/ (Cr Revenue 500 차변Expences 500/ 대변cash 500

4 -1. Accrual Basis =GAAP Required for Small Business company Earned Revenues Incurred Expenses Accrual Basis Accounting Revenues incurred Expenses incurred 서비스 제공시 AR 500 / Revenue 500 서비스 받을때 Expences 500/ AP 500 Cash Paid Cash received (Dr)Cash 500/ (Cr AR 500 차변AP 500/ 대변cash 500 AP: Accounts Payable AR: Accounts Receivable Ex: 2008 -2010 Rent fee $3, 000 2008: 1000: rent expenses 2009: 1000: prepaid expenses 2010: 1000: prepaid expenses

5. Current assets and current liabilities Current assets: cash , Accounts Receivables, Accrued Revenues on account: 신용거래 Current liabilities : Account payable, Accrued expenses Accrued Revenues 결산 시 수익으로 계상 Current assets Accounts Receivables Accrued expenses 결산 시 비용으로 계상 Current liabilities Account payable

Income statement PL For the year dec. 31, 2008 1). songle step income statements= revenues-expenses single step income statements Revenues sales 　 interest revenues Total revenues 28500 　 600 　 29100 　 12825 　 EXpenses Cost of goods sold 　 Selling expenses 1800 　 　 Adminisrative expenses 2100 　 　 interest expenses 400 　 　 loss 800 　 17925 　 11175 　 Total Expenses Incomese from continuing operation before provision for income tax 세금전 경상이익

Multi-step income statement: 비용을 차감해가는 손익산출방식. Recognition of sale 용역제공 1회경우: realize /Recognize =Realization Principle 상품이 delivery 싯점이 sale로 Recognize service 가 계속적으로 이뤄 지는 경우 : 시간의 경과에 동반해서 수익을 인식하는방법 예: 건설회사의 공저에 따른 매출인식 Gross margin=Sales-CGS(cost of goods sold) v. Cost of goods sold: Beginning inventory + purchase- Ending inventory v. Operating income: Gross margin- operating expenses Selling expense: Sales man salaries, advertising, Freight-out/in Administrative: accointing and legal fee, officer’s salaries 매출 총이익 영업이익 경상이익 개념 암기 이해

u. Income from continuing operations: 경상적인 이익와 기본사업외 활동이익 Other revenues: interest revenues Other expenses: interest expenses Unusual or infrequent items: loss/gain foreign currency loss/gain on sale of fixed assets operating income 　 　 　 other revenue 11775 　 interest revenue 600 other expences 　 　 interest expense 400 incime before unusual or infreqient items and income taxes unusual or infreqient items 　 11975 　 800 loss foreign currency income from continuing operations before provision for income taxes 11175 provision for income taxes 4470 income from continuing operations 　 　 6705

Balance sheet 고 Assets 고 currents assets 유 동 성 저 Long term investments Property , plant and equipment Intangible Assets Liabilities 유 동 성 Currents liabilities 저 Non current liabilities Stock holders’ Equity capital stock common stock preferred stock Additional paid in capital Retained Earnings Working Capital currents assets- Currents liabilities 비즈니스에서 지불능력과 운영능력을 나태 내는 중요지표이다. 자산은 유동성이 높으면 양호하고 부채는 유동성이 높으면 불리하다.