Financial statements are the final product of the accounting process. They provide information on the financial condition of a company. The balance sheet, one type of financial statement, provides a summary of what a company owns and what it owes on one particular day.
Assets represent everything of value that is owned by a business, such as property, equipment, and accounts receivable. On the other hand, liabilities are the debts that a company owes-for example, to suppliers and banks. If liabilities are subtracted from assets (assets-liabilities), the ammount remaining is the owners’ share of a business. This is known as owners’ or stockholders’ equity.
One key to understanding the accounting transactions of a business is to understand the relationship of its assets, liabilities, and owners’ equity. This is often represented by the fundamental accounting equation : assets equal liabilities plus owners’ equity.
Assets = Liabilities + Owners’ Equity
These three factors are expressed in monetary terms and therefore are limited to items that can be given a monetary value. The accounting equation always remains in balance; in other words, one side must equal the other.
The balance sheet expands the accounting equation by providing more information about the assets, liabilities, and owners’ equity of a company at a specific time (for example, on December 31, 1993). It is made up of two parts. The first part lists the company assets, and the second part detais liabilities and owners’ equity. Assets are divided into current and fixed assets. Property, buildings, and equipment make up the fixed assets of a company. The liabilities section of the balance sheet is often divided into current liabilities (such as accounts payable and income taxes payable) and long term liabilities (such as bonds and long-term notes).
The balance sheet provides a financial picture of a company on a particular date, and for this reason it is useful in two important areas. Internally, the balance sheet provides managers with financial information for company decision-making. Externally, it gives potential investor data for evaluating the company financial position.
NERACA
Laporan keuangan merupakan hasil akhir dari proses akunting. Laporan keuangan memuat data keuangan suatu perusahaan. Neraca, jenis laporan keuangan yang berisi ringkasan tentang kekayaan dan hutang perusahaan pada suatu hari.
Aset adalah semua milik perusahaan yang bernilai, seperti tanah, perabotan & tagihan piutang. Sebaliknya, hutang adalah kewajiban yang harus dibayar – umpama kepada supplier atau bank. Jika hutang dikurangkan pada aset (aset- hutang) sisanya adalah kekayaan pemilik perusahaan. Ini dinamakan kekayaan pemilik perusahaan atau pemegang saham.
Kunci untuk mengerti transaksi akunting bisnis harus mengerti hubungan aset, hutang dan kekayaan pemilik. Ini sering dinyatakan dengan persamaan dasar akunting aset sama dengan hutang ditambah kekayaan pemilik.
Aset = Hutang – Kekayaan Pemilik.
Tiga unsur ini dinyatakan dalam nilai uang dan oleh sebab itu terbatas untuk barang-barang yang tidak dapat dinilai dengan uang. Persamaan akunting selalu tetap sama, dengan kata lain, sisi yang satu harus sama dengan sisi yang lain.
Neraca memperluas persamaan akunting dengan memberikan lebih banyak data tentang aset, hutang dan kekayaan pemilik perusahaan pada saat tertentu (Umpama pada tanggal 31 desember 1993). Neraca terdiri dari dua bagian. Bagian pertama berisi aset perusahaan dan bagian ketua hutang dan kekayaan perusahaan. Aset terdiri dari Aset lancar dan aset tetap. Uang tunai, tagihan hutang, perabotan, dan barang dagang semuanya adalah aset lancar. Tanah, gedung dan peralatan merupakan aset tetap perusahaan. Hutang pada neraca terdiri dari hutang yang harus segera dibayar (Seperti tagihan hutang dan pajak penghasilan) dan hutang jangka panjang (Umpama bond dan hutang jangka panang lainnya).
Neraca berisi gambaran perusahaan pada suatu waktu. Dan oleh karena itu berguna untuk dua sisi yang penting. Kedalam, neraca memberikan data keuangan kepada manajer untuk membuat keputusan perusahaan. Keluar, neraca menyediakan data kepada calon investor untuk mengevaluasi keadaan keuangan perusahaan.
Comprehension
A. Answer the following questions about the balance sheet. Questions with asterisk (*) cannot be answered directly from the text.
1. What is the final product of the accounting process?
The final product of the accounting process is the balance sheet.
2. What is a balance sheet?
A balance sheet is a final product that provides a summary of what a company own’s
and what it owes on one particular day.
3. Does the balance sheet provide financial information for a long period of time or does it provides information for a specific point in time?
It provides information for a specific point in time for example, on Jan 30,1993.
4. What is the difference between assets and liabilities?
Assets represent of value that is owned by a business, liabilities are the debts that is a
company owes.
5. How is owner’s or stockholders’ equity determined?
Owners’ or stockholders’ equity is determined by subtracting liabilities from assets.
6. How can the relationship between asset, liabilities and owners’ equity be represented?
It can be represented by the fundamental accounting equation : assets equal liabilities
plus owners’ equity.
7. Does the accounting equation lways remain in balance? +why or why not?
Yes, it does. Because one side must equal the other. If not, it must be wrong with the
recording.
8. How can the business use a balance sheet? *as a manager, how would you find a
balance sheet useful?
A balance is useful for a business, because it provides a financial picture of a company
on a particular day. It provides manager with financial information for company
decision-making.
B. Complete the balance sheet by writing in the correct terms from the list below.
Assets Current liabilities Long-term liabilities
Liabilities Fixed assets Current assets Stockholders’ equity
International Manufacturing, Inc.Balance Sheet
Senin, 16 November 2009
Minggu, 08 November 2009
AN ACCOUNTING OVERVIEW
AN ACCOUNTING OVERVIEW
Accounting is frequently called the “language of business” because of its ability to communicate financial information abaout an organization. Various interested parties, such as managers, potential investors, creditors, and the government, depend on a company’s accounting system to help them make informed financial decisions. An affective accounting system, therefore, must include accurate collecting, recording, classifying, summarizing, interpreting, and reporting of information on the financial status of an irganization.
In order to achieve a standardized system, the accounting process follows accounting principles and rules. Regardless of the type of business or the amount of money involved, common procedures for handling and presenting financial information are used. Incoming money (revenues) and outgoing money (expenditures) are carefully monitored, and transaction are summarized in financial statements, which reflect the major financial activities of an organization.
Two common financial statements are the balance sheet and the income statement. The balance sheet shows the financial position of a company at one point in time, while the income statement shows financial performance of a company over a period of time. Financial statement allow interested parties to compare one organization to another and/or to compare accounting periods within one organization. For example, an investor may compare the most recent income statements of two corporations in order to find out which one would be a better investement.
People who specialize in the field of accounting are known as accountants. In the United States, accountants are usually classified as public, private, or governmental. Public accountants work independently and provide accounting services such as auditing and tax computation to companies and individuals. Public accountants may earn the title of CPA(Certified Public Accountant) by fulfilling rigorous requirements. Private accountants work solely for private companies or corporations that hire them to maintain financial records, and governmental accountants work for governmental agencies or bureaus. Both private and governmental accountants are paid on a salary basis, whereas public accountants receive fees for their services.
Through effective application of commonly accepted accounting systems private, public, and govermmental accountants provide accurate and timely financial information that is necessary for organization decision making.
Comprehension
Answer the following question about accounting. Question with asterisks cannot be answered directly from the text.
why is accounting called the “language of business”?
How is a standardized accounting system achieved?
What are revenues and expenditures?
What do the balance sheet and income statement have in common? How are they different?
*How might the information contained in financial statements be useful to managers? *How might creditors use this information?
How are accountans classified in the United States?
What kinds of services do public accountants provide?
What is a CPA? *Do you have a similar type of position in your country? *Explain.
*Which type of accounting-public, private, or governmental-appeals to you the most? *Why?
*What are some management decisions that might be based on accounting information?
Answer :
1. According is called the “language of business” because of its ability to communicate financial information about on organization.
2. In order to achive a standardized accounting system the accounting process follows accounting principles and rules.
3. Revenues are incoming money and expenditures are outgoing money.
4. The balance sheet and the income statement are two common financial statement. They are different, the first shows the financial position of a company of one point of time, while the second shows the financial performance of a company over a period of time.
5. The information contained in financial statements might be usefull to creditors in help them to find out whether the company will be able to repay the credit on time or not.
6. In United States, accountants are classified as public, private, and governmental.
7. Public accountant provide accounting services such as auditing and tax computation to companies and individuals.
8. A CPA is a Certified Public Accountant. Yes, we had. Formerly faculty of economic graduates of 5 elite universities got ‘Drs….AK’ degree.
9. Personal question
10. In some company financial decision making might be based on accounting information. For example the management want to expands its business to build a bigger factory to introduce new variety of goods.
Circle the letter of the answer that best completes each of the sentences below.
Accounting information is used by ______to help them make financial decisions.
a. managers
b. potential investors
c. creditors
d. all of the above
Regardless of the type of business or the amount of money ivolved :
a. all companies use identical accounting systems
b. balance sheets are more important than income statements
c. common procedures are used in handling financial information
d. no standardized accounting system is employed
3. Business monetary transactions are summarized in :
a. bank books
b. financial statements
c. computers
d. cash registers
4. Public accountants may earn the title of CPA by :
a. becoming governmental accountans
b. paying a fee
c. fulfilling rigorous requirements
d. obtaining a Bachelor of arts degree in accounting
5. Private and governmental accountatnts are paid on a____basis.
a. salary
b. monthly
c. fee
d. weekly
Vacabulary Exercises
A. Subtitute appropriate terms for the italicized words or phrases in the sentences below.
status agencies monitored maintain independently
procedure fee hire rigorous solely
1. Many accounting departments have strict enterance requirements;
only the most qualified applicants are allowed to enter these
programs. rigorous
2. The particular method used to process employee insurance
claims may vary from company to company procedure
3. The stock market is closely watched every day. monitored
4. Rather than expand into foreign lines, the dress shop manager
chose to deal only with domestic fashion designers. solely
5. Although the consultant’s charge for services was high, his
guidance and advice were well worth the money. fee
6. The financial condition of a company is reflected in its financial
statements. status
7. When the business began to expand, a second bookkeeper was
brought in to help keep the books. maintain
8. In the United States there are numerous organizations that
provide services at the local, state, and national levels. agencies
B. Complete the sentences with the noun, verb, and adjective forms provided.
1. Communication/to communicate/communicative
a. Supervisor should strive for two-way communication with their
employees.
b. By using an overhead projector, the guest speaker was able to
communicate his statistical information clearly.
c. Because of the clerk’s highly developed communicative skills, she was
given a position that required her to deal directly with customers
2. Information/informed/informative
a. The owner informed his employees that they would all receive a 5 percent pay increase.
b. Getting Acquainted with Accounting, by John L. Carey, is very informative book.
c. Financial information is essential for organizational decision making.
3. Allowance/allowed/allowable
The supervisor lost control of his staff members after he allowed them to override his decisions.
When the factory was built 50 years ago, little allowance was made for remodeling and expansion.
Althought allowable, smoking was discouraged in the lunch room.
4. Fulfillment/fulfill/fulfilling
At times the assembly line worker felt a lack of profesiomal fulfillment
When he was promoted to production supervisor, however, his job became much more fulfilling.
Before the accountant could became a CPA, she had to fulfill a number of requirements.
5. Standars/has standardized/standard
The standard paper size in United States for business letters and memorands is 8,5 x 11 inches.
The computer department has standardized its procedures for storting and retrieving data.
Nowadays rigorous standards are enforced in the area of food processing and packaging.
C. Fill in the blanks below with the most appropriate terms the list.
parties financial statement reflected standardized allows
whereas interpretations informed communicates rigorous
An income statement is one example of a financial statement, it communicates financial information about a company over a period of time. A standardized format
Is used to present the financial information. This allows interested parties to compare one income statement to another in order to make informed financial decisions. But there is still a great deal of risk involved in financial decision making because the information reflected in an income statement is object to variety of interpretations.
Look at the reading to answer these questions.
What does each of the following refer to?
LINES WORDS REFERENTS
1 its accounting
4 them whereas parties
19 another corporation
21 one organization
Accounting is frequently called the “language of business” because of its ability to communicate financial information abaout an organization. Various interested parties, such as managers, potential investors, creditors, and the government, depend on a company’s accounting system to help them make informed financial decisions. An affective accounting system, therefore, must include accurate collecting, recording, classifying, summarizing, interpreting, and reporting of information on the financial status of an irganization.
In order to achieve a standardized system, the accounting process follows accounting principles and rules. Regardless of the type of business or the amount of money involved, common procedures for handling and presenting financial information are used. Incoming money (revenues) and outgoing money (expenditures) are carefully monitored, and transaction are summarized in financial statements, which reflect the major financial activities of an organization.
Two common financial statements are the balance sheet and the income statement. The balance sheet shows the financial position of a company at one point in time, while the income statement shows financial performance of a company over a period of time. Financial statement allow interested parties to compare one organization to another and/or to compare accounting periods within one organization. For example, an investor may compare the most recent income statements of two corporations in order to find out which one would be a better investement.
People who specialize in the field of accounting are known as accountants. In the United States, accountants are usually classified as public, private, or governmental. Public accountants work independently and provide accounting services such as auditing and tax computation to companies and individuals. Public accountants may earn the title of CPA(Certified Public Accountant) by fulfilling rigorous requirements. Private accountants work solely for private companies or corporations that hire them to maintain financial records, and governmental accountants work for governmental agencies or bureaus. Both private and governmental accountants are paid on a salary basis, whereas public accountants receive fees for their services.
Through effective application of commonly accepted accounting systems private, public, and govermmental accountants provide accurate and timely financial information that is necessary for organization decision making.
Comprehension
Answer the following question about accounting. Question with asterisks cannot be answered directly from the text.
why is accounting called the “language of business”?
How is a standardized accounting system achieved?
What are revenues and expenditures?
What do the balance sheet and income statement have in common? How are they different?
*How might the information contained in financial statements be useful to managers? *How might creditors use this information?
How are accountans classified in the United States?
What kinds of services do public accountants provide?
What is a CPA? *Do you have a similar type of position in your country? *Explain.
*Which type of accounting-public, private, or governmental-appeals to you the most? *Why?
*What are some management decisions that might be based on accounting information?
Answer :
1. According is called the “language of business” because of its ability to communicate financial information about on organization.
2. In order to achive a standardized accounting system the accounting process follows accounting principles and rules.
3. Revenues are incoming money and expenditures are outgoing money.
4. The balance sheet and the income statement are two common financial statement. They are different, the first shows the financial position of a company of one point of time, while the second shows the financial performance of a company over a period of time.
5. The information contained in financial statements might be usefull to creditors in help them to find out whether the company will be able to repay the credit on time or not.
6. In United States, accountants are classified as public, private, and governmental.
7. Public accountant provide accounting services such as auditing and tax computation to companies and individuals.
8. A CPA is a Certified Public Accountant. Yes, we had. Formerly faculty of economic graduates of 5 elite universities got ‘Drs….AK’ degree.
9. Personal question
10. In some company financial decision making might be based on accounting information. For example the management want to expands its business to build a bigger factory to introduce new variety of goods.
Circle the letter of the answer that best completes each of the sentences below.
Accounting information is used by ______to help them make financial decisions.
a. managers
b. potential investors
c. creditors
d. all of the above
Regardless of the type of business or the amount of money ivolved :
a. all companies use identical accounting systems
b. balance sheets are more important than income statements
c. common procedures are used in handling financial information
d. no standardized accounting system is employed
3. Business monetary transactions are summarized in :
a. bank books
b. financial statements
c. computers
d. cash registers
4. Public accountants may earn the title of CPA by :
a. becoming governmental accountans
b. paying a fee
c. fulfilling rigorous requirements
d. obtaining a Bachelor of arts degree in accounting
5. Private and governmental accountatnts are paid on a____basis.
a. salary
b. monthly
c. fee
d. weekly
Vacabulary Exercises
A. Subtitute appropriate terms for the italicized words or phrases in the sentences below.
status agencies monitored maintain independently
procedure fee hire rigorous solely
1. Many accounting departments have strict enterance requirements;
only the most qualified applicants are allowed to enter these
programs. rigorous
2. The particular method used to process employee insurance
claims may vary from company to company procedure
3. The stock market is closely watched every day. monitored
4. Rather than expand into foreign lines, the dress shop manager
chose to deal only with domestic fashion designers. solely
5. Although the consultant’s charge for services was high, his
guidance and advice were well worth the money. fee
6. The financial condition of a company is reflected in its financial
statements. status
7. When the business began to expand, a second bookkeeper was
brought in to help keep the books. maintain
8. In the United States there are numerous organizations that
provide services at the local, state, and national levels. agencies
B. Complete the sentences with the noun, verb, and adjective forms provided.
1. Communication/to communicate/communicative
a. Supervisor should strive for two-way communication with their
employees.
b. By using an overhead projector, the guest speaker was able to
communicate his statistical information clearly.
c. Because of the clerk’s highly developed communicative skills, she was
given a position that required her to deal directly with customers
2. Information/informed/informative
a. The owner informed his employees that they would all receive a 5 percent pay increase.
b. Getting Acquainted with Accounting, by John L. Carey, is very informative book.
c. Financial information is essential for organizational decision making.
3. Allowance/allowed/allowable
The supervisor lost control of his staff members after he allowed them to override his decisions.
When the factory was built 50 years ago, little allowance was made for remodeling and expansion.
Althought allowable, smoking was discouraged in the lunch room.
4. Fulfillment/fulfill/fulfilling
At times the assembly line worker felt a lack of profesiomal fulfillment
When he was promoted to production supervisor, however, his job became much more fulfilling.
Before the accountant could became a CPA, she had to fulfill a number of requirements.
5. Standars/has standardized/standard
The standard paper size in United States for business letters and memorands is 8,5 x 11 inches.
The computer department has standardized its procedures for storting and retrieving data.
Nowadays rigorous standards are enforced in the area of food processing and packaging.
C. Fill in the blanks below with the most appropriate terms the list.
parties financial statement reflected standardized allows
whereas interpretations informed communicates rigorous
An income statement is one example of a financial statement, it communicates financial information about a company over a period of time. A standardized format
Is used to present the financial information. This allows interested parties to compare one income statement to another in order to make informed financial decisions. But there is still a great deal of risk involved in financial decision making because the information reflected in an income statement is object to variety of interpretations.
Look at the reading to answer these questions.
What does each of the following refer to?
LINES WORDS REFERENTS
1 its accounting
4 them whereas parties
19 another corporation
21 one organization
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why spelled out members to drag on ??? hmmm. . . because our time of download something requiring old time effect of speed of internet which we use very tardy.
If you wish to improve speed of your time internet of download hereunder there are some way of is easy, shorten to improve speed of download. Besides easy to the way of this do not have to require software. Useful hopefully (^_^)
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