Professional Documents
Culture Documents
Accounting Principles: A Business Perspective, 8e
Accounting Principles: A Business Perspective, 8e
Accounting Principles: A Business Perspective, 8e
A Business Perspective, 8e
Chapter 1:
Accounting and Its
Use in Business
Decisions
Chapter 1
z Partnership
a business owned by two or more persons
associated as partners.
Accounting Principles: A Business Perspective 8e
Copyright 2005 Hermanson Edwards Maher
Chapter 1
z Corporation
A business owned by a few persons or by
thousands of persons and is incorporated under the
laws of one of the 50 states.
Chapter 1
z Merchandising companies
Purchase goods that are ready for sale and then
resell them to customers.
z Manufacturing companies
Buy materials, convert them into products, and then
sell the products to other companies or to final
customers.
Accounting Principles: A Business Perspective 8e
Copyright 2005 Hermanson Edwards Maher
Chapter 1
z Profitability
The ability to generate income.
Chapter 1
Financial Statements
The income statement
z Reports the profitability of a business
organization for a stated period of time.
Revenues are defined as the inflow of assets
resulting from the sale of products or the rendering
of services to customers.
Expenses are the costs incurred to produce
revenues.
Accounting Principles: A Business Perspective 8e
Copyright 2005 Hermanson Edwards Maher
Chapter 1
Financial Statements
Continued
Chapter 1
Financial Statements
Continued
Chapter 1
Financial Statements
Continued
Chapter 1
Financial Statements
Continued
Chapter 1
Chapter 1
Chapter 1
Chapter 1
z Transaction analysis
A summary of transactions format is used to
summarize activity and provide a basis for
preparation of the income statement and balance
sheet
Chapter 1